Member Info for TigerByTheTail

Hi Paul!
If you own, say, 10% of Centamin and 10% of Endeavor then there is a clear logic to this merger.
Bigger, multi-mine, multi jurisdiction gold miners are valued higher (20-30%) by the market than smaller, single mine, single jurisdiction goldies - that's a fact. Also, Centamin's cash pile could be used to reduce debt at Endeavor, which is uncomfortably high.
Unfortunately, rather a large number of Centamin's institutional shareholders are also shareholders in Endeavor. So this is quite a powerful motivating force.

Hi Siko!
Just to say thanks (as always) for your posts.
Hi Mr. Tibbles!
Loved to read the backstory of your avatar!
Tiger

Hi Bobliz!
If you look back to the RNSs announcing the PUSU extension, they were quite specific that the extra time was needed for actual mine visits.
Also, remember that Centamin's COO used to work for Endeavor and Endeavor's COO used to work for Centamin. So I imagine the two companies know most of each other's secrets.

Hi Prof!
I also have trouble seeing how Endeavour can make any bid work given their straitened circumstances. But, that said, judging by the downward pressure on the share price, it seems that they haven't given up and gone away yet. I expect the conclusive negotiations between the two boards will take place this weekend.
Frankly, I expect surprises here. I make it that Centamin is a very appealing takeover prospect - it trades at a big discount as a single mine operation, and its "first mover" advantage in Egypt is potentially worth billions. So I wouldn't be surprised if a rival bidder emerged. Or if Mr. Sawiris started to buy in via La Mancha. Or some other major development was revealed.
But I don't think Endeavour will succeed in their bid. And when they finally do go away, I expect Centamin's share price to rise.

https://www.kitco.com/news/2020-01-08/Rhodium-prices-soar-on-demand-driven-story.html

Hi Cowichan!
I couldn't agree more with your post.
It's not the most important thing in the world, but the lack of reporting of the Burkino Faso results is simply insulting. Are we to assume they just drilled dust for several years?

Instead of a merger with Endeavour...
How about Mr. Sawiris buys a few percent of Centamin and the board appoint him to succeed Josef as Chairman?
Isn't he about the best candidate available?

Hi Sotolo!
EDV offer now 127.2p equivalent, exactly matching CEY's price as I type this.
I'm not at all convinced that this merger deal will happen, but I see value in Centamin shares at this price (as long as CEY have either hit their annual guidance of 490K or missed it by less than 10K).

Just dropping by...
So, Nickel Investor, you haven't considered the possibility that the special dividend was announced to allow an insider to offload their shares at a well-supported price?
After all, the ex-CEO / major shareholder is under investigation, and this is Wild East we are talking about here...

It looks to me like the seller (presumably Majedie) has finally cleared. Since the seller was offloading at a substantial discount to fair value, I'd expect this share to rise quickly back into the mid 40s (at least) ahead of quarterly results.
Yes, it's possible that some production may have been lost due to power supply issues with Eskom. But the loss of ounces produced will (IMO) be more than made up for by the rising basket price for platinum, palladium, and rhodium. All in all, I make SLP seriously underpriced.

Here's my best guess for 2020...
From the outside it looks like we are waiting for several developments with regard to Star Zinc in Zambia - the receipt of the small scale mining licence, the appointment of a mining contractor, the formal signing of the pre-negotiated offtake agreement with Jubilee Metals, and the raising of enough finance to see this project through to production in Q2 2020.
I think what we will see is that these developments are all linked together, and that we are in fact waiting for one very big piece of news - that is, the announcement of an approximately 50/50 joint venture with a Zambian mining partner for Star Zinc. The Zambian JV partner (perhaps the very well-connected XTR partner KPZ International?) will be responsible for both the start-up finance required and the actual mining, whilst GLR will commit the Star Zinc resource. The mining licence will be issued in the name of the JV. Likewise, the offtake will be signed with Jubilee in the name of the JV.
So, all being well, there will be one monster transformative RNS sometime in the next couple of months, not a series of discrete developments. The price for this? Giving away around 50% of Star Zinc, but no further share dilution. I'd expect the share price to rocket on the announcement of such a deal - given GLR's current tiny mcap it should at least triple.
Galileo will also still hold all of Kash'itu for the future. And, of course, their share of Glenover.

Hi Rebess!
I really hope you're wrong and that Centamin will hit (or only just miss) the guided 490K ounces of gold for the year. It would be truly despicable to issue a profit warning after hours today. Indeed, if there is to be a profit warning it should by rights have come already. However, all that said, I fear you could be right, and that fear is enough to make me hold off on buying any more Centamin shares for now.
All in all, this is a strange game that is being played here. The PUSU extension makes me think that there is a fair chance of the merger being agreed in early January, although I'm confident that Endeavour will need to improve their offer first. Clearly, there is more to this than we can see from the outside.

It seems I have a different take on recent events from many posters on this board.
As the Reuters article made clear, Van Eck see a Centamin - Endeavour merger as potentially lucrative for them, simply because bigger, multi-mine, multi-jurisdictional mining companies are rated substantially higher than smaller, single jurisdictional operations. Unspoken, they may also be fed up with Centamin's poor management - they wouldn't be alone in that.
It seems that I also think Endeavour's current operations are far better than many posters - Endeavour's production will grow quickly over the next few years, and their debts should be easily manageable given that the gold price doesn't crash and Burkino Faso doesn't descent into total anarchy.
That said, this proposed merger is now a mess, with both parties squabbling in public. I've got no real idea what is going on behind the scenes. But I note that we haven't had a profit warning, which we should have had by now if Centamin's production was going to be materially lower than 490K ounces. So I guess if Centamin are going to miss guidance at all, it will be by less than 10K. That makes the current share price an attractive entry point in itself. So I bought a few more yesterday afternoon, and will add on Monday as well.

Hi Mr. Tibbles,
Yes, Mr. Youseff El-Raghy (Joseph's uncle) did indeed tell the Egyptian press production this year was hopefully going to be 490,000 ounces - as per Siko's link.
But, remember, a year ago, the same gentleman told the Egyptian press that production for 2019 would be 550,000 ounces. Then, a few weeks later, we found out that official production guidance would be 490,000 to 520,000 ounces. And now we're struggling to make the lower end of that range. So caution is warranted.

Hi Mr. Tibbles!
I must admit to disagreeing with you on this.
After meeting Endeavour, Centamin have agreed to do due diligence on Endeavour. This will obviously take longer than 2 weeks, especially given that Christmas is here. So, if Centamin are serious people, they will agree to an extension of the PUSU deadline, just so that they can complete the work they have already committed to completing.
We should also remember that what is being talked about here is (at least technically) a "nil premium merger" of equals, rather than a takeover. These mergers seem to be all the rage in the gold sector at the moment (see Cowichan's post earlier), a fashion started by Mark Bristow and the merger between Barrick and Randgold. There is some sense in it all - the market doesn't like small gold producers, and it wants to see diversified operations and economies of scale.

Well, I'm happy to hold and to add here.
Given production has been even vaguely decent, the coming quarter's figures should be spectacular - even better than the Q1 numbers, and they were pretty damn good.
Also, whilst palladium may not hold $1900 for long, it does seem to be in a genuine structural deficit (like rhodium). So this doesn't look to me like a short term price spike, like vanadium had a couple of years ago. Rather, I think prices for palladium (and rhodium) will stay elevated for some years to come.

A fool and his money will soon be parted. Especially, a fool he thinks himself oh so clever.
As usual, as regards FRES, your misquoting figures or quoting highly selectively. Others have already pointed this out.
And, to repeat, FXPO's "former" boss is a wanted criminal suspect, and its main business is situated in a war zone inside probably the most corrupt country in the world. To trust your money to that company is truly and spectacularly dumb. Yes, its headline numbers make it look cheap at the current price. But actually it is very expensive, because all investors in it will lose 100% when the inevitable inevitably happens.

Nickel Investor!
"Accounting for Dummies" is actually quite a good book and it will help you to not make a fool of yourself here. You are bluffing that you know what you are talking about, and it doesn't look good.
By the way, have they arrested your Ukie oligarch yet - you know, the shadow boss of your share promote FXPO?

Hi Schomosport!
The Egyptian authorities / EMRA don't own any shares in Centamin, as such. But they do own 50% of the operating company for the mine at Sukhari, and their ongoing approval is vital for Centamin's cash flows.
If the Egyptian authorities are actively supporting Endeavour (and its major shareholder, the Egyptian billionaire Mr. Sawaris), then it will indeed be difficult for Centamin to say no to the proposed merger deal.
I also suspect the major shareholders may be in favour of new management at Centamin. Current management performance has been poor, and Endeavour's management is energetic. Remember, the market marks down single mine operations by as much as 30%. The mere act of combining Endeavour and Centamin into a mid-tier multi-mine operation should result in the market cap of the combined companies being substantially higher than the market cap of the two companies considered separately.

Hi Rebess!
I basically agree with you that this is a done deal, or, at least, a nearly done deal.
I'm also very uncomfortable about the behaviour of Centamin's directors. To me, the giveaway has been the non-reporting of the West African drill results and various studies. Why do that except to suppress the share price?
But here we are, and we must play what is in front of us.