Member Info for Sotolo

Thanks as ever Gnome, Someone else pointed out on this board a couple of weeks ago why the predictions on gold are so often uncorrelated, especially in a bear market, they said the likes of Andrew MaGuire etc have a vested interest in talking the metal they are selling up as they seek to sell more and draw more customers in, as you say some people make their money writing rubbish and others lose theirs by reading it. Thos pundits like Gary Wagner who advise on going both long and short with futures rather than selling the metal tend to do better unsurprisingly as without the interest in selling it, but none of them have the most brilliant record at predicting it. All one can say with the greatest probability is it will go down further before it goes up, where the bottom is and when no one knows even if they say they do and one can take predictions especially from those with a vested interest with less than a pinch of salt!

Yes the rear view mirror shows fields of roses

Not sure about Aclara, it has fallen 4 fold since it’s recent launch with failed permissions, and yes it yields that now but presumably dividend will be lower next year. Hopefully around fair value here till gold lurches down again….

Any knowledgable views on today’s RNS exploration update and whether it is as expected or better or worse? Thanks

Sadly I think British internal politics has little effect on the gold price any more, we are now less than 2.5% of the world economy, USA and its interest rates etc are a different matter

Talking of gold and Centamin in particular, rather than Bojo, on the back of a fag packet if we get 10% inflation on aisc costs would be about $1500 an ounce so with gold at $1700 and half the profit to Emra we would be making about $100 an ounce on around 445k oz so about £37m. it is interesting that we are still valued at near £900m so the market is expecting a very big cost reduction in the coming year. Also interesting that on the same metrics Hoc would make not much less profit but is valued at less than half, £400m. Hoc share price is normally about 70% more than cey but now level. I think that is first because Hoc is thought of as a silver miner with some gold though the reverse is now true, second the outlook for Hoc isn't great while third, the market expects a lot from Horgan and Centamin. Of course if gold fell another $100 profits would halve and Cey would be on a forward PE of something like 60 at this share price but of course first the share price would halve bringing the PE back to what I reckon is around 30 now, and also of course if costs fell $200 an ounce profits would double and IF gold stays put bring the PE down to around 15 and extra ounces would bring this down to a more normal 12, so I will be watching the costs at the next report like a lynx. Also it might be time to switch some Cey share back to Hoc, if you can bear to be in this scary market altogether. Sorry if a bit off message and not talking about Brexit the Conservative party etc but there is a big world out there and this is a lovely place to avoid British parochialism and think of the big and frightening economics affecting our company's future profits and our nesteggs. All imho and just with a fag packet

if we add 10% onto predicted costs for inflation we would come ut at $1500. If we sold 360koz at $200 profit that would be $72m, heaved it for taxes and other costs and turned into sterling and around £30m profit, market cap £400m PE around 13, so shares now about right price unless gold fall another $100 in which case should halve imho, or another £200 in which case profit wiped out

of course they produce far more ounces of silver than gold but it sells for getting on for a hundredth of the price, only a third of the profit comes form silver now and that is falling. once the so=ilver hedge ends next year silver profit proportion will become far less, almost all purchases and successful exploration are gold, so market is out of date which gives one an opportunity

3 bear you are right it is the sterling price of gold that matters to our shares, so gold is down only 5% from the high at £1550 to £1480, however the problem is costs which in sterling will have soared, aisc will have doubled from around £600 or so only 2 or 3 years ago (2020 was forecast $895) to around £1200 reducing profit per ounce from near £1000 to around £250 and falling. hence share price fall though not yet as far as profits, presumably in hope of recovery, so all eyes on the aisc coming down as expected in next results, despite inflation.

Finder it doesn’t really produce a high amount of silver any more an with Pallancata likely to close next year silver will be quite minor. Als o the costs aren’t “equally relative to the market”. They are higher. Hence the cheap price.

Finders that applies to the big boys who have lower costs, Hoc is a very high cost smaller miner sadly

Niklol the share price will either reach zero if metals tumble and it faces years of loss making/government closes mines, or return to £1.08 which I think is more likely, however £1.08 will be worth less given inflation. I still think the market thinks this is a silver miner and as silver is an industrial metal that will be hit heavily by the coming depression values it as such rather than what it is, a gold miner which might be saved if gold turns in time

Mike thanks, hope you are right! Anyone her notice slp tumbling the past couple of days, is that catch up after their share buyback, that has been propping up the pric, ends; finally worrying about falling PGM prices to which they are entirely exposed or something more ominous?

So it is your fault Niklol…. But then who was responsible for the fall from 320 to 107 where you bought? Niklol if you thought it was a good buy at 107 hand on and don’t worry but as I and other have suggested, I wouldn’t buy more till it turns up and goes through your buy price! Remember catching falling knives is a most painful game

That would give a forward e of around 17, hardly low if you (like I) expect profits to fall further in this cycle pushed down by increased costs and taxes, the hedge ending and Pallancata having to close, and fewer ounces again. Hope of course that I am utterly wrong, madly holding on on the basis that some rabbit will pop out of a hat, oh and I just saw a pig fly by. However I do have to say our management got couple of things very right, Edouardo Hochschild selling a large chunk of shares at over double this price, and then offloading Arcat(at a high cost to us as we I for one ended up paying double their value in tax because of their uncaring mess of shareholders (other)), just before its permits failed, so they may be wilier than I think, just wish it also applied to mining, well let’s see

Freedom, inflation should have hit the aisc hard so say $300 profit a gold ounce reduced by hefty tax so around £30m profit, anyway with my very rudimentary maths and of course going down as metal prices fall and costs and tax rise further.

Freedom I think Emma takes half the profit, we only get the other half then pay a further 2.5% royalty on it. However this is not so much worse than the tax regimes in some other countries, but of course did hit our net profits hard as it kicked in and ratcheted up to the full 50%, hence also not helping the share price over the last few years.

Thanks Mike, however a quick question, you say profits go near zero with PGM basket at $2000 and chrome at $200, yet in a slightly earlier post you report management predicting 2023-2034 PGM basket $1630-1666/oz, and chrome $145-150/tonne. Are they and you predicting large losses, or have you got the break even price much too high even with inflation? Thanks

Freedom, yes indeed however a third of our silver - the expensive Pallancata output - is sensibly hedged around $26 till the end of next year. If silver is at this price or lower then, Pallancata will probably have to close as Arcata did a few years ago. However worth remembering we are mainly a gold mine. If costs become $1500 as I expect with inflation at least, and gold were to stay around $1800 we would still be making probably £30k a year, which would give a sensible share price below where we are. But if gold and silver were to rise….

Two thoughts: Cey is now under 70p in last year’s money, given inflation, sadly. And will Andrew MaGuire ever be right forecasting again today a large scale revaluation of gold and silver. By the law of averages and random events surely he must be right one day, just hope it is in any of our lifetimes, if not mine.