Member Info for Sotolo

Yes, I always find gold charts confusing: the question is do you look at them in dollars which look promising, or pounds or euros which look the opposite. Then gold has a habit of doing the opposite to what you expect, except where it catches you out and doesn't So will it defy the dollar charts and drop, before doing what is expect and climbing, or the reverse. It has been, is being, a long wait... tempered by CEY's production, hurt by their costs, (like so many miners, especially those unlike Cey that had higher costs so underinvested when gold price fell and are now paying the price for new exploration and soaring AISCs) and so dependent on that unpredictable gold break out Gold has been within a range for so long whichever way it is coiling like a spring

Yes it is a bit worrying The last couple of result have been bad, with costs up and profits way down, but you would have thought the fall in price had now taken account of that. So maybe something worse. There is no �should� to the price, it is just how many holders want to sell, and how many want to buy the shares. There are obviously still more sellers, who either know more than we do, or consider those results still haven�t been fully taken account of When a growth share fails to grow it badly affects sentiment, esp if continued There is also the rating agencies downgrade on the debt. I continue to hold on the basis that if gold/Silver rises this now high cost mine is more heavily geared than lower cost miners. But you are right noggers, holders still seem keener to offload than buyers to buy

A. Share prices look forward at expected profit growth or decline B. Companies can choose to keep more profit to reinvest or as a cushion or give out more in dividend. So I look at profit not dividend, some shares pay out more than their profit which is unsustainable so high dividends can often pressages a fall. Randgold yields something around 2% which is normal for a miner expecting growth. However profits are expected to rise hence quite a high pe. But as profits rise this pe predicted to fall to a little over 20 in next couple of years at current share price which would mean around a 5% profit, with maybe half as dividend. Centamin pays out sometimes all its profits in dividends which is lovely, but is currently expected to not grow profits much and has a looming court case over ownership that has been hanging over the shares for year. So investors take a bigger risk with Centamin, many institutions put off, for a bigger reward. Looking forward however while Randgolds pe is falling centmain is predicted to stay on a pe around 16 (6% profit) which has been rising. So all in all with centamin you have lower growth, more risk and less dividend cover. So priced about right for current gold price. Of course if the court case is abandoned, West Africa comes good, and gold price soars we will win the lottery. A final thought when choosing gold miners. Mines get used up. Historically the gold miners have overall been bad at using much of their profits on new exploration/mines that don�t justify the investment as profit they end up making more than cost, last few years most have invested less with profits tight and paid dividends as they improve. So soaring share prices. Now they need to explore again to keep their profits up, but that eats the profits. I think this explains the last year�s falls in many miners like Hoc and Rrs, CEY has held up as explores less but tha means profits predicted not to grow much, but this could be wise as their costs are low, and they can find more where they are. Above all CEY has v low debt, and low costs so can ride out trouble albeit with a lower price. So I go with CEY Ps these figures may be rough or incorrect but overall I go with this

Till the next one, there�s usually another in August

Ps I would pay 60% tax on the dividend taken as income, (as lose personal allowance) but 20% cgt which is why unless share jumps it is better to sell and buy back, last year I sold the day before it went ex div, and then bought back next morn to avoid the dividend. I think one has till Tuesday to do this but as says depends on the share not rising, and then falling the full amount of the dividend on ex div day to fully save (or at least 30% of it to be better off doing this when include spread), I think!

I too sold at the end of today, as last year to avoid the dividend and heavy tax on it preferring to take a capital gain, so I am hoping price will fall by weds. I remain a long term holder in expectation of inflation, but interesting article today by John Authers on how the Philips Curve, the inverse relationship between unemployment and inflation, has been disproved. However as you say other reasons for inflation. Fascinating markets spooked by probability of deflation one year and inflation another. Quite so on debt being used as an excuse for meanness.

Also the return on equity is pretty low, and the pe still high, expecting profit growth which depends on controlling costs and Silver price rising. However as share price drops the expected pe becomes more sensible. Hochschild has been around nearly a century, I am not a trader, and holding, but as well as worrying about the company�s poor control of costs and hence roe, I worry about costs increasing further with more exploration, mining inflation inc oil, and rising interest rates to service debt, I worry about the falling price of Silver that could push us to losses, and although debt paid down still a lot of it, I assume others who. Think like me have been more sensible than me and selling. Hopefully most will be out soon, unless Silver falls further, or Hoc issues more bad figures.

Sorrymqchine respelt Noggers ans Bobbers!

Bobbers there is a reason. Since the poor results (not ounces mined but profits) people haven�t wanted to buy and as it falls more sellers come out, the market is very unforgiving of stumbles in growth shares on high PE�s. However unles Silver falls further the company should not be losing money and should be able to service its debt which has come down, so I am bravely hanging on, but I can see why others bale and the share continues to fall.

Sadly I am not shorting, I am a long term holder, unfortunately holding many hundreds of thousands of the shares, and I reckon it will be a long while till I make money from these again, unless price of gold rises, which seems unlikely with booming US economy and rate hikes. Unfortunately it is no use producing more of anything and making less profit, which is the case with many miners including hoc now. After years of low investment through v tough times miners are having to spend now both on plant and exploration, lowering profit expectations unless gold price rises quite a bit. So I would ignore production figures and focus on costs and profit expectations. I think maybe ADVFN is a more useful board as has both sides of the argument, could do with more discussion and explanation on why Hoc is down over a third on here -and not just that this is irrational but why so many have wanted to sell rather than buy. Imho

Barclays says profits for year ending 31 Dec 2016 to 2019 �214m �109m �114m �109m. So also say down 4%next year. Like Uncertain I think it is very hard to predict what gold price will do when financial bubble bursts, depends. A lot on rela interest rates, but of course all share pe�s will rise in falling markets affecting the miners too, but if gold was to stay this price profits would fall slightly as costs rise a bit. On another note last year I sold my CEY outside the ISA the day before it went ex divi and bought back the day after so paying 20% cgt rather than 37%. Problem was share didn�t fall amount of the divi, but a little less, ie it rose when including the divi, so I saved very little. This year my dvi is down to �25k so would save about �4K, but think won�t bother, so I too would much prefer a share buyback. Good to see CEY holding up so far compared to rivals, which seem to expect weak gold price and rising costs, as they have to get spending again on new equipment and exploration. All imho

Methinks it doesn�t matter how much they produce, but how much profit they make, and sadly that is not forecast to double at all, as all in sustaining costs rise, hence falling price as anticipated profits steadily fall.

Am I reading it wrong but looks to me like CEY net cash was down �40m last year with profit share and big divi? Interesting comparing to Hoc who mine roughly the same amount in equivalent gold ounces but worth half as much, and pe much higher. Their cash flow last avaialble year was around the same but their profits were less than a third of CEY. Cash matters but so does profit hence pe, all only imho and hope reading figures right, interesting to see what hoc come up with next week as their costs have been lousy like many.

Prof, indeed Marmot has much wise to say on the important POG front. However on CEY itself, Barclays smartinvestor (I know iffy) says profits to Dec 16 �214m Dec 17 �109m (mainly profit share), and predicts to Dec 18 �113m, Dec 19 �106m. Ounces mined may rise slowly, so may POG, but if costs rise and hefty profit share, then more than obviates it. So my belief is profit share has been a big drag on the share price, which would have been higher otherwise. It also appears from their figure that the divi is not covered. The Sunday Times (also not v reliable) says pe of 22 divi of nearly 8, while other miners only give away half or quarter of their profit to us shareholders. I love CEY for this but does question their divi long term. Only some thoughts.

Drax, I think the price of gold is affected by expectation of not so much the interest rate, as the real interest rate especially the US one as the dollar is the world�s currency. Gold is a hedge against inflation and rises with it, but rising inflation leads to rising interest rates. The question is which will rise faster, ie the expectaion of real interest rates. Currently it looks to me like the rate is negative with expected US cpi over 2% this year rising with the falling dollar if dollar continues to do fall. There will only be 4 rises this year (which is spooking teh market) if it looks like inflation is indeed rising, but will we get to real positive interest rates? That is the question the market is tussling with imho

Dear Uncertain. Gold is decently up today in Sterling and our counterindicator has sold out, so optimism?

So now we get the answer to what happens when share prices tumble. It seems so does gold, and sadly in the US this eve gold shares (the hui) considerable more than the rest of the market. There is a tussle here between rising inflation (Good for gold) and the resulting rising rates (bad for gold). I still think the price of gold depends considerably on the expected real interest rate, so the question is does Mrs Market expect inflation or interest rates to rise faster.

In my view Hoc costs seem up around 8% so requires gold price $100 higher or silver $1.30 higher to make the same money, if I read it right, so justifies share price around 15% lower at same gild and silver price, to take account of these rising costs, lower profitability and the growth of the last few years tailing off next? So share price now about right for the gold and silver price and will rise if gold and silver do further. Shame Hoc didn't report good results like CEY and FRES both of which climbed, but two poor results in a row. To reiterate it isn't just the quantity mined that counts, but more the cost of getting it out and replacing it. All just IMHO, but disappointing

Ps Eish sadly look at the figures you posted This year 38m Silver equivalent ounce mined at cost of $12.2-12.7 per oz Next year 38m Silver equivalent ounces mined at cost of $13-13.4 per oz

Yes production is up and he is concentrating on the positive, but what matters is future profitability, which is not helped by rising costs, this is what your fellow investors are noticing, hence the falling price, as the pe at the current share price expects some strongly rising profits , This from a wise person on another board on the results:: �One thing definitely not liked is that the days of massive chunks coming out of costs over 4 years from 2013 to 2016 has come to an end here with guided costs up again for this year. They cut to the bone to survive but can't continue to operate the business on an on-going basis at those levels........