You are wonderful gentlemen, ladies, or theys. The whole poem might have been written just for us brave and/or foolhardy Centamin investors, holding on in hope of production rising, costs falling, or most influential gold finally trusted and soaring, bought by worried countries and investors, and rising far further above its long term price than it has already in the last few years rather than reverting to its historic norm. Especially the first three verses:
IF you can keep your head when all about you
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired by waiting, 5
Or being lied about, don’t deal in lies,
Or being hated don’t give way to hating,
And yet don’t look too good, nor talk too wise:
If you can dream—and not make dreams your master;
If you can think—and not make thoughts your aim, 10
If you can meet with Triumph and Disaster
And treat those two impostors just the same;
If you can bear to hear the truth you’ve spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to, broken, 15
And stoop and build ’em up with worn-out tools:
If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breathe a word about your loss; 20
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: “Hold on!”
Approx 3000 tons of gold ,or 96million ounces, are mined each year. So Kinesis will mop up 2% of that which is sadly not very significant, if I have my maths right. Also Tibbs your last post asked why I had bought gold (or rather seemed to accuse me of lying and suggested I hadn’t, unless I misunderstood you), I bought at 79.7 just before the results, and posted that I had, as I thought they should be slightly better and the price should improve. They were and fair value moved in my estimation to 90p, as happily has the price. At the moment I continue to hold as I have made 12%, they are fairly priced with current knowledge nd gold price in my estimation, and pay a decent dividend even if poorly covered. If gold falls I shall rethink, as Rebess and others have pointed out we are almost entirely at the mercy of the gold price until there is more news on ounces minded and costs, it is a bit offputting seeing other miners reporting their costs rising, so I shall be watching this metric hard.
Each to his own, it is what makes this such an interesting board, so let’s not insult each other or distrust each other but benefit by learning of different views that make a marketplace, so understanding it better. Thank you all.
I represent myself and rational economics like Rebess etc. Please respect that we just have different views to you, and that does not mean we are in the pay of some dastardly conspirators. We have all been losing capital as shareholders too, me much as I didnt my advice that cey was overvalued on an economic basis, tho did top up at 80 before results as posted.
On another note interesting to see that gold, which us rationalists think is such key part of cey price, is in sterling within 2% of a 5 year high and 10% of an all time high. Uncertain where is it in terms of your diploma or whatever your currency basket was called, and what do you think it means for cey fair value.
Finally Occams law says the simplest explanation likeliest, which is there have been more sellers than buyers over the last year, as the view has been profits will fall, which has proved correct, good old market.
. It is a question of whether there are more sellers than buyers. Currently they equate with a price of around 90p. “ The market price is the current price at which an asset or service can be bought or sold. The economic theory contends that the market price converges at a point where the forces of supply and demand meet.” I believe Razor is right that the market works out what a share is worth considering current knowledge and for Cey as we see, and as I have said, that is currently around 90p. When you look at Cey prospective profit and the overall market’s PE the price of Centamin seems about right to me. Of course if the info was to change ie gold price to move or court case, the market price would change. You might want this share to be higher, so would I, but at current projected profit why on earth should it be? Sadly it is a question of forward profit plus dangers like the court case.
Of course you are entitled to think conspirators are suppressing the share price by selling their shares, and Cey should be on a far higher PE, maybe 40 or 60, but sadly that only happens with super growing companies and shareholders sell shares because they think they will fall compared to the market.
Peel Hunt started coverage today, broadly saying what I have been banging on about costs being the problem. I think the shares may have a little upside now on relief at lower than expected cost rise and slightly lower than expected production fall year on year, but 90 to 100 remains fair value till gold price recovers or costs get back where they were which is less likely.
* Peel Hunt sees production recovery at Sukari mine starting in 2Q19, but with an increased y-o-y cost base
** Says greater visibility is needed on the medium-term Sukari production and costs profile to get investors back into the stock
** Says ultimately, thinks Centamin is fairly valued on 2019 basis, with modest upside to its 2020 valuation
As said I looked forward to this morning with trepidation and hope, trepidation as last few results were so bad, hope as expectations for these results were so low, I said I invested over £200k thinking the results would show the worst is over and unlikely to be even worse than expected. Still was worrying
Yes aisc is still high, yes production is still low, but the fall has been halted and as a result I hope the share price will turn, but not back up to 190 yet, as we now need a higher gold price for the same share price. Let’s hope as said market looks at rot being stopped rather than rot. I plan on holding. The management have done quite well
Well that’s a bit better
Just beat the lowered predicted production figure that so hit the share price, still well below a year ago but improving
And AISC at bottom of raised expectation...so far
The year is expected to be as predicted
But for CENTAMIN THAT IS GOOD NEWS
so let’s hope market reacts to ‘on course’ rather than below last year and shares rise a bit today, even amidst weak gold
Tibbs sadly this is from over 2 years ago, a very different time. Since then the AISC has soared, so cey now needs to make another couple of hundred dollars an ounce or more to break even if I have it right.
Cey is currently no longer a cheap producer and needs a higher gold price to make similar profits, hence the fallen share price. . For me while other have worried about falling output it is the soaring aisc which has been the really worrying bit of the news tho I know the one is partly the result of the other. Let's hope the forward aisc is finally down a bit tomorrow but don't hold your breath.
I did say I wasn't sure about my figures, just doing my best, but I guess you are right. If gold fell 15% to 1100 Cey would be making around $140 an ounce, $70 after profit share so around £25million pounds at current output, at a pe of 10 that would put value at £250m or at a pe of15 hoping for some recovery £375m. That is a drop of rather more than 60% from the current value of £925 million, but I think you are right it might only fall 60% or maybe the multiplier gets smaller as it falls as there is more hope it will recover so 3 fold and the share just falls 45%. This is all v rough, and based on disc of $960 but of course exploration would be cut reducing this. Anyway just a thought...and of course you are right they don't always add up as sentiment as you say is hugely important and there are many variables that can be adjusted by the company, but somewhere to start. Thanks P and L
Looking forward to tomorrow’s results with trepidation and hope. Viz our fallen share price, the share price compared to price of gold doesn’t compare with a few years ago. First with aisc having soared and now up to $960 a 1% drop in gold is now a 4% drop in profits and gold has fallen by 7% so that accounts for 30% of share price fall or around 40p in my reckoning, then with the current aisc a 1% rise reduces profit by another 2.5% and aisc has risen approx 10% so that is another 25% before the smaller loss to profit of lower production. Then profit share. Hence the fallen share price. Last year the entire free cash flow/ profit after profit share fell to $63m with an aisc of $884, Now aisc is higher again profit and dividend should be down further, but how much? Before anyone accuses me of shorting I spent over £200k on cey this morning hoping that tomorrow will show the worst is in the price. But for me the figure I will be looking for is the aisc, which is hard to get down especially with rising oil (2019 high today) and depends also on recovering production so I’ll also be watching forward profit guidance and any recovery in production though of course what we need most is what our company has no control over, that the gold price rises. To reiterate with the now high profit share, and rather high aisc compared to historical, the multiplier for this share on the gold price is getting quite high so gold price has larger effect. Good luck all tomorrow. If this has rising aisc’s and more falling production we could be slammed like competitors have been recently, and quite fairly; let’s hope the report and market look beyond quarter one which is often weak
Ps anyone figures are rough, do correct if wildly out but give right idea
Exactly Mr Tibbles. Buybacks are good in countries where it saves you hefty dividend tax, but if you have shares in Isaacs and peps dividends are tax free, so if like me and my here a UK resident investors with Cey shares happier with dividends.so Andrew please keep paying them, Enough said.and just what suits me and many here.
Andrew, many of us own Centamin for the large dividend you pay. As Investopedia say “a dividend payment represents a definite return in the current timeframe that will be taxed, whereas a buyback represents an uncertain future return on which tax is deferred until the shares are sold.“ pointless in an isa or sipp.
Thank you for having the sense not to have bought back shares when overvalued and double this price. I for one appreciate the choice of taking a good few per cent each year as a tax free dividend in my isa and sip, and as cgt in my investment account by selling the share the day before it goes ex dividend and buying it back once it has.
I am now, slightly worriedly, Looking forward to seeing if you have yet turned a corner in the first quarter’s result. In the meantime pleas continue to do what you think is best for shareholders, and thanks gain for the sensible attitude to new exploration and the very large dividend, please don’t overdo it,
Shares discounting bad news, might be surprised on the upside. Problem is first quarter still likely to be quite low but forward news should be better, depends which market looks at
Tibbs, My strong view is it is not anything said on these boards that affects the price but the fundamentals. If you look at Cey sadly the profit is down with rising costs and profits share as well as lower production, so a rising pe, but as always said I am a long term holder. I like the cash, and even though the dividend is reduced, it is still good. I just choose to take it in capital as takes me into losing my personal allowance. And Siko thank you so much for posting, we all post our views based on what we hear and see, and I for one appreciate them all, even the conspiracy theorists, but especially you who often has good knowledge. Please please Siko keep posting, and others please don’t accuse posters here of trying to talk shares down, as shorters, as it is far more likely that posters see the fundamentals as justifying a lower price, and we appreciate all views. Thanks
Yes indeed but whopping profit share and higher costs now
It is salutary to look at cash flow per share, I have in US cents, for 2016,17 and 18: 32 31 19 and 13c predicted for 2019 which if right would be a near 3fold drop in 3 yers.
On ex divi, The share price should drop exactly the amount of the dividend tomorrow, to remain the same in real terms as today. I always sell day before the divi and buy back to pay cut father than divi tax. If others are doing the same will be weighing on the shares today.
Ps to have a pe of even 15 the market demands expected future profits growth, and to have a pe any higher the market wants good long term expectations. With flat profits the expected pe would be even lower.
Sadly there is every justification for the share price being where it is. The footsie 250 has a pe around 15, cey pe is currently considerably higher even at this lower share price, its costs are rising and the price it sells gold for is falling so profits could fall and pe rise even further. Hence more people are selling than buying. Sorry particularly as I remain a long term holder
Yes, many pm miners seem to be coming in with Lower than expected production, as Fres did today, and get hammered for it as we did, also hurting each there as making miners seem more risky. After the lower quarter, all seem to say special reasons and promise recovery next quarter...and then the quarter after that.... I often wonder whether it is partly because many miners underinvested when pm prices were low in the first half of the decade, and continued to, contributing to reduced production now, the first leg of the share price, and whether they will have to invest more going forward to make up for this, pushing up aisc’s, the second leg of the share price, of course they can do nothing about the third leg, the gold and silver prices, which is why the first two are so important, and worry some when they go the wrong way
Mr T
You say he company is undervalued by 20% because of the court case. Well the 2018 divi, the second half of which is paid this month, totals 5.5cents and 100% of free cash flow, so I make the PE something like a lofty 26, and with fallen production and rising costs, plus 50% profit share, the free cash flow and divi are likely to fall a bit more, so the pe to rise further, which is way more than the market, and discounts some doubling of profit. In my opinion therefore the court case is no longer holding the price back, which is quite lofty, and if ever resolved there will only be a short lived blip up.
I remain a holder for the company’s great payout of 100%, rather than investing in more holes in the ground, or doing share buybacks etc, although I know you and others start trolling anyone who suggests the price might be accurate or fall, as a wild shorter, as on many of these boards, or hold the share because they believe in the board, why else would you? Also in my opinion it is as helpful to see reasoning as to why the share price should be lower as much as higher, to have fundamentalists and conspiracy theorists, gold bulls and bears.