Member Info for Tornadotony

The weekly and daily chart for Centamin has a confirmed falling wedge. The pattern has a completion within 4 weeks. A falling wedge is most likely to have a bullish breakout. I would expect the gap within the 100-102p area to be back filled sometime next year.

Panda

I only took the difference from Yanofilla AISC to gold price sold as being the extra cash to support what was happening plus the loss reported in Q3. For Q4 I took the downgrade from 30,000 ounces production to 10,000 ounces and multiplied 20,000 ounces by $800 fixed cost per ounce (as staff should already be there, inventory and ore has to be built up etcetera). Those figures take you to $29M overrun. That figure is not unreasonable for a new mine in a new country. There was only a 30% chance they could hit budget. What they can not afford to happen is to lose control of costs from now on and the whole thing becomes a blow out (20% chance). So investors need to be aware of some degree of risks.

For what its worth I calculated the entire cost overrun as $29.5M with $16M arising in Q4. 25% overrun can happen with a new mine construction that has staff resource issues which may explain the very low production activity. As long as investors have 9 months of patience with the share price then the project may pull through to where investors hope for. Betts and his family have let people down in the past. It is a risk and elephant trap to be aware of.

I hold no position on this one. Hopefully the new mine improves and does not give Caracal type of production results for much longer (Poor oversight management and under resourcing in that case).

Steve I was not referring to Centamin back in 2011 but the FTSE 100 gold miners at that time.

Just noticed SP 500 has lost the support lines and starting to break down. Next line to hold is at 4116. Something big is starting to unfold.

I do not recall Centamin trading below 7.2 PE rates. The company is earning far more than last year on the bottom line and we are trading at 20% lower valuations on the mean 2022 share price. Free cash flow is far higher than last year. We shall learn more on Monday. To go through major support lines on no volume where the descent breaks bollinger bands with no real news is staggering when gold is not that far off $2,000 an ounce. The suppression on gold miner stocks reminds me of what happened in May and June 2011. The suppression resulted in a 50% rise by September that year.

MrMyth

Your first message and welcome aboard. Centamin is sitting just above a major support line 78.8p area. The SP 500 4152 support line held a couple of hours ago. A fifth support line exists at 4149 and the next stop down is 4116 area. The only remaining areas of support are at 4045,3900 and then down to 3500. The reason why I am watching this is that gold may move sharply in response. This morning gold rose higher as SP 500 was going lower.

Steve

Not real growth and the market response has ignored the GDP print. On zero hedge they show how health care data is manipulated in the Bureau of Labour Services (BLS). So 4.7% health care inflation is manipulated by different measurements down to -2.6% by all the data now excluded. This actually has a huge impact on distorting GDP calculations. If GDP was so great then USA investment would be going up and now sharply falling. Unemployment numbers would not have been revised up 70,000 and companies in most sectors are reporting lower earnings. Sad to say the GDP number is completely wrong. The inventory increases always happen in October as they have Thanksgiving Friday sales and Christmas.

H1 was around $1934 area sold and last quarter was around $1923 with the hedging.

Small buy average down.

US SP 500 has 5 central support lines between 4186 to 4149. They are all contained in a 1% spread in the index. If they all go it is a major breakdown in the USA markets. Next support is somewhere near 3500. Could be a black October Thursday.

Bonds and gold go higher. Everything about to hit the fan.

Next time somebody tells us how great Hummingbird is on our LSE Shanta site we will remind them of today.

Publican's communications are repetitive and hence the LSE do give a green filter button when it gets too much (yellow card hit to Publican). We are all aware that we invest on what we can afford to lose and get returns on winning investments elsewhere is part of the game in recovering where an investment has blown out. The reality is that the reserves and resources in this project are such that it is possible for this overrun to be managed and that project gets across the line in Q3 next year hopefully without any more overruns or issues. There is no second chance here for HZM if that event occurred. The reality is whether line 2 can follow on later on and both lines get into operation a few years from now. If it does HZM can pay off all the debts and the share price can get back to 160p again. It will take time and those who do take the risk need to be aware a number of elephant traps need to be avoided and something being possible is no guarantee it will arise.

I should comment some of the majors like Rio Tinto have lost fortunes building new mines. Fresnillo also had a painful experience with its new mine, but it will soon hit nameplate production. 44% of all new mine constructions above $500M have HZM problems (complexity of the project and need for engineering adaptations and recovering lost labour resources). Delays of 6 months on the timeline also fit with this profile. I hope publican is proved wrong on how small investors do get treated in the coming weeks.

Tony

The cash burn did include the solar farm build which repays itself back in 2 years. The cost of the solar farm was around $37M. Egyptian assets under the current CEO have increased $185M in the 2022 annual report of which some of this is additional plant and new kit. Doropo also increased in value by $4M.

So although the company has spent a lot of money, it has been repairing the roof as the sun was shining. The investments have saved Centamin a good $100 per ounce in production costs per ounce of gold sold that would not have arisen without investments being made and the life time of most of those investments will last to when Sukari runs out of gold in 2033.

What is key are good reserve and resources updates on Sukari in December. What could be a game changer would be the drilling results outside of Sukari. If they strike with impressive exploration results and it would be lucky if they found another open pit source for producing gold that had underground potential as well, but Centamin would rocket higher on the news. The whole point of holding on here is for that chance to materialise in the coming weeks when drilling results get analysed. Hence, I support the strategy as Centamin being a hold. Tony

Oops yes it should have been 500 kt what a mistype. They have probably mined out 1500 kt of ore ready for processing from the open pit. It therefore is down to underground grade being used in the mine plan and KT uplifted above the usual 220-245kt range.

The only chart gap created this year is between 100.5p to 101.1p created on 2 June 2023. Sharing this to save those interested from checking it out. At some point that gap will get filled as it is above 0.3p, typical difference to ask and bid.

For every 500 tonnes sitting on the ROM pad they have 10,000 ounces of mined out gold ore for processing. If they have built up lots of low grade ore as stated in Q3 then around 1500 tonnes in total amounting to 30,000 ounces is in the back log of milling. The milling down time appears to be 18 days for one mill and directly created a 500 tonne processing shortfall and dropped Q3 output by at least 10,000 ounces. The capacity of the mills could recover the 10,000 ounces in Q4. However the underground feed grade has to be higher or they pull up more tonnage of usual grades. The future of Sukari was moving underground mining rates at 220 kt and future targets are at 385 kt. However, that may impact on the grade going into the feed. I wonder if they will try and deliver 290 kt underground feed in Q4. Hopefully, the CEO may give a hint if that is what he is doing when he replies to Steve's question during Q4.If so then I believe 450,000 target remains possible.

Rover62 I take your points on board. I will take a break from HZM board until fate is known here.

I have worked with many companies during my life creating new products. Many CEOs have told me if they knew all the complexities that could arise at the start, they may not have taken on the original challenge. The resilience to come back from set backs can be a real test of character. Several mentioned the support I gave them and finding additional financial resources helped considerably when a road block was put in front of them. The outcomes and successes they achieved impact many of our citizens today. The reward in delivering new jobs, supporting the local communities, generating a product the world needs is hugely rewarding. Not all projects succeed. I still want to see the Chairman giving a signal whether it is a modest share buy or an RNS to say that the Board is heavily involved in the current process and has full confidence in the CEO and CFO. It means a lot for Fisher to do something like that.

In the meantime; https://www.zerohedge.com/markets/peter-schiff-most-obvious-financial-crisis-nobody-sees-coming

Port in a storm and it could be a biggie.