Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video here.
It is often said that trouble comes in threes.
There have been two profit warnings will the next thing be a reduction in the FY dividend?
- 2017 FY fee cash flow was USD 142 million
- 2017 FY dividend USD 0.10 was 100% of 2017 free cash flow
- 2018 HY free cash flow was USD 36.1 million
So on a very rough correlation 2018 H2 must turn in USD 105.9 million free cash flow if the FY dividend is to be maintained. Not sure if this is correct calculation / correlation or not.
While I disagree strongly with the nefarious actions of CEY Board they seem adept at slipping in profits warnings.
http://www.mining.com/centamin-drops-12-percent-second-cut-annual-output-target/
http://otp.investis.com/clients/uk/centamin_plc/rns/regulatory-story.aspx?cid=1756&newsid=1196027
The rule is, jam to-morrow and jam yesterday - but never jam to-day.'
The words piis up and brewry come to mind.
FFS CEY managment have got the guidance wrong again.
What the f**k are the playing at? Bunch of incompetent wankers.
Overview
Gold production for Q3 was 117,720 ounces, a 27% improvement on the second quarter ("QoQ"), resulting from month on month operational improvements in the open pit and underground; September was a strong month with production of 48,511 ounces. However operational improvements have taken longer than planned to materialise;
In Q4, we expect improvements to be sustained and production in the region of 145,000 ounces, resulting in a total 2018 annual production of approximately 480,000 ounces.
The recent presentation maintained forecasted guidance so unless there are any more suprises Q3 should show an improvement in line with what is needed to achieve guidance. If not CEY Management will have a hard time explaining it.
Not sure but this may be of interest. https://www.silverdoctors.com/gold/gold-news/gold-shorts-near-record/
Sotolo I value your views, they are informative, good to see and present logical reasoned opinion. Not necessarily views and the hard truths that emotional investors (myself included) want to see but valid and eyeopeners nonetheless.
I too wish I had not bought in again after offloading in the recent plunge. I sold just shy of 50% at 138 on the recent plunge but then bought in again at 130. C'est la vie.
Right now, I am in quandary, wish for the best but fear another fall. Reasons a) perception of the gold price, b) AISC rising (reduced production and rising costs), c) uncertainty if production will meet full year guidance.
Lol are there any positive reasons why I should continue to hold?
Good morning Mr Tibbs.
Hope this explanation and insight may help to provide background as a partial answer to the question ".. what penalty clauses were in the contract with Barminco or failure to deliver the specified service!..".
The amount of any penalty if there is one will likely fall far short of the Client's (CEY) actual loss because penalty clauses are usually limited to a maximum of 5% or 10% of the subcontract value or other appropriate benchmark.
Likewise, no chance of suing Barminco because consequential damages are also usually excluded from the liability of the subcontractor to the Client. Consequential damages / loss being a defined term in subcontracts and includes loss of use, loss of production etc.
The reason for this approach is commercial efficacy so the subcontractor does not price in inordinate amounts of risk in the subcontract and make the subcontract price to high.
On the flip side it is up to the Client (yes our beloved CEY Management) to identify the risks and to specify the scope of the subcontract properly.
I have not worked in mining but in large-scale single producer power, oil and gas projects (single producer situation) for critical equipment which if failed would stop production it is normal practice for the Client to identify and manage the risks of the project (project risk analysis) to avoid such a catastrophe that occurred. Also normal procurement practice to have built a requirement into the subcontract for Barminco to have capital and or insurance spares available.
I am shocked that CEY management did not do so and await with interest the Q2 Reports to see an explanation of how such a situation came to be, the actual impact on production and what CEY Management are doing to resolve production shortfall. Also what action has been taken against the responsible Director i.e. loss of bonus etc.
From the facts so far disclosed it is my belief that CEY Management were at best asleep at the wheel or as is more likely the case negligent and duplicit.
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Insurance Spare Definition. An insurance spare is a spare part that you hold as a part of your spare parts inventory, that you would not typically expect to use in the normal life of the plant and equipment but if not available when needed it would result in significant losses.
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Capital spares are spare parts which, although acknowledged to have a long life or a small chance of failure, would cause a long shutdown of equipment because it would take a long time to get a replacement for them.
Has anyone more recent news re the new mining strategy than this link from 3 months plus ago? The new strategy is supposed to be ready bu August 2018.
"In revealing plans to develop the sector to optimise Egypt’s benefit from mineral wealth, the Petroleum and Mining Minister Tarek el Molla noted that the current contribution of mining activities to the GDP does not level up to the tremendous mining capabilities the country is abundant with.
The first step in this process involves engaging Wood Mackenzie to study the country’s mining sector and lay out an appropriate development strategy by August this year. Wood Mackenzie is a global energy, chemicals, renewables, metals and mining research and consultancy group with an international reputation for supplying comprehensive data, written analysis and consultancy advice.
The Minister’s remarks came during the signing of a contract between Wood Mackenzie and Egypt’s Enppi company, which will offer logistic and technical support for the consultancy group. The Minister said the new strategy would include setting up mining industries and developing areas surrounding mining activities."
http://www.africanminingnetwork.com/news/egypt-includes-mining-in-development-strategy-comment-by-yolanda-torrisi/
Here is a link from 11-Jul-18
https://www.atonresources.com/news/2018/aton-updates-latest-developments-at-hamama-west-rodruin-and-within-the-egyptian-minerals-sector-grants-stock-options/
Lol must be true even the Daily Mail (UK) is reporting on it.
http://www.dailymail.co.uk/news/article-5946135/The-world-running-GOLD-Mining-experts-warn-discoveries-shrinking.html
Hi Rebess yes ageed, sensible and strategic use and management of funds is vital, especially so if it can also result in a flow down with positve effects as you kindly highlight. A concern is CEY Management don't seem to have a plan to disperse / flow down surplus funds not needed for development. Fundemental to this would be a clear view on how much and when. It would then be easy to subtract that from the present cash surplus and return the difference to shareholders or spend some on flow down investment. From the recent 5-Jun presentation movement in Africa seems a long time off. I fervently hope I am wrong in this belief.
Hi Downhill. What I wrote is my true and genuinely held opinion and not verbal abuse. In other words fair opinion which I am happy to debate. Perhaps you could start the ball rolling and list / extol what the current CEY management is doing well other than to feather their own nests. All plaudits to Yousef and Joseph who had the foresight and tenacity to develop CEY but from what I can see all the present CEY Management are doing is running a single mine and from the latest debacle not effectively. They are literally sitting on a gold mine.