Member Info for Tornadotony

Any rise on pound value from higher wage data is quickly disappearing. Other reports are showing problems.

Bloomberg commentary suggesting pound is now on the slide down. This makes it harder to predict how Centamin reacts to any pullback on gold as earnings when converted to pounds does not change much.

Initially I thought it might be a pennant or a triangle in the weekly chart but the pattern during September looks like a flag formation with 3 weeks still to run. Happy to see other chart folk comment on what they can see. October is starting to look like a volatile month. I am not expecting that much to happen in September as we got pass USA Labour day with little follow through on direction. For this week we shall see if they pull back a bit on USD. If the markets pump USD, I suspect China and Japan to defend their currencies and not have imported inflation.

Correction in previous

So if the company was earning 5 cents a share last year and it is earning 7.5 cents this year, the issue is the profit if the USD and pound sterling rate was the same and so we should have a higher share value (and currently they do not despite the pound barely increasing value against USD).

Sotolo the 3 to 1 ratio worked many years ago. What has changed for the miners was the host government take either on profit share, royalties or central and local taxes. It is not so much inflation but what governments leave the miner with to make money from the gold price.

A second factor for the miners is production growth and for Centamin it has run on a 5% increase for what will be two years running. Increased production equals higher revenue if the gold price was the same as the previous year. for Centamin the average gold price last year is far less than the current year. This is visible of the increased profits and earnings per share on the H1 interims. So if the company was earning 5 cents a share last year and it is earning 7.5 cents this issue as profit then the company if the USD and pound sterling rate was the same should have a higher share value (and currently they do not despite the pound barely increasing value against USD). The AISC last year is broadly the same as this year and centamin has managed out the negative impact of inflation through a vast number of efficiencies plus 5% increased production.

What has changed is the volumes being traded, the heavy shorting of gold miner ETFs in a less liquid market and the effect is to collapse the forward PE rate from 16 to around 7.5. The historical PE rate since profit sharing was around 15. The PE rate is now back at levels seen in 2014 when production was far lower along with the gold price and there was no profit share. When the profit share was fully introduced the PE rate was doubled in that year. The argument being made is that high interest rates should reduce the PE rate which appears to have been applied on gold miners and possibly bank stocks. All other sectors appear to retain high PE rates as they had before and await a future correction. I therefore see the down side on Centamin as being substantially delivered. It does not mean it can slip further down but this idea that it may fall 35% after falling 32% already this year does not suggest this share going to 56p. We have to note this share has been falling for months already.

Https://www.gold-eagle.com/article/gold-silver-are-facing-2008-conditions

https://www.gold-eagle.com/article/something-isnt-adding-us-debt-soars-2-trillion-2023

That article is complete garbage imop.

1. They may try and eradicate cash completely, but enough people will go against it. As soon as we have one incident of the entire system being shut down and business can only continue with cash, the absurdity of everything at a standstill for a whole day is to damaging. A lot of people deliberately use some cash as they do not want either family members knowing what was spent on a particular item or they do not want the State to see what they bought. Not everyone has a good quality mobile phone, not everyone is meta stable to use a mobile device, some supplicants will not have the apparatus to receive digital payment, and a few people won't have bank accounts especially in rural areas.

2. Only the desperately ill already will play ball another Covid jab. Party gate has killed any chance of the general public following government health advice on Covid. The damage of lockdowns has also become overwhelming known.

3. Currently the gold miners have a diabolical bearish sentiment reading. It will be really hard to crash gold miners which in fact are already bombed out from months of selling. The ETFs for gold and gold miners have been selling off already for months. Despite such high volume selling (ETF gold volume held is at 23 year low) since May, gold has held up fairly well. The USD has been pumped by false economic data. NFP numbers are being halved after revisions and have been down graded consistently for 9 months running. GDP measurements in USA do not make sense. Unemployed numbers are not accurate either and are far worse (Walmart can now employ people on lower wages) USA has record bankruptcies in courts for August2023, last seen before Lehman blew up and in March 2020. The idea that USA economy is robust is laughable. In essence some have argued that gold miners and gold are near the bottom already and what may happen is a strong move to the upside a few weeks from now.

The article posted telling me gold will go down to 1350 tells me that we are closer to the end of a retreat in prices. If we get a few more like them it would encourage me to buy more precious miner stock.

Steve

It was not dire for long. Gold and gold miners have dropped back for some time. The gold miners are generally oversold and the sentiment level is rapidly approaching levels that are 90% bearish. The ETFs have massively sold off gold for months. The HUI mining sector and gold was bombed out first in 2008 and it was the very first to pull out and recover. The fact that this sector is getting absolutely hammered at least in the mining stocks suggests they are pricing in something really big unfolding. Hopefully the truth emerges instead of outright manipulation and fraud of official stats. Gold eagle has an article on tonight. It may take a few weeks for things to show up and in the short term they may and try and make things more bearish with more false economic data. A lot of sources are now saying the data does not look right and it appears to be done to hoist up USD. Tony

Ooops made an error $488M is only 1/2000 of QT. So maybe not that big of event next week.

Looks like regional banks going bust may soon be unfolding State side. Republic First is in trouble and has not filed 2022 accounts. Debts are running at $488M. Interesting to see if the FED prints money to cover it and save the bank. Nearly half all that QT money they took off their balance sheet. Not sure how the FED guarantee system works. i am sure a number of other regional banks will get in the same mess as mortgage defaults pile up along with all the auto loans.

Interesting that GDP of 2.4% USA 2nd quarter growth that monkey hammered gold below 1900 a few weeks back was revised down a month later to 2.1%. I wonder how much the next revision will drop it. It is now crystal clear that falsified job data and other major economic measurements over estimate what is real to give a false narrative on the USA economy.. Current USA dollar rally is based upon utterly false data propagated over media channels. USD is seriously overvalued.

Https://insiderpaper.com/turkish-crypto-boss-sentenced-to-11196-years-in-jail/

Https://news.bloomberglaw.com/bankruptcy-law/us-bankruptcy-tracker-courts-see-busiest-august-on-record

Now running at the same level as March 2020 and a few months before Lehman Brothers bank failure. Banks on the receiving end of $236B losses last month.

USA manufacturing is now in a full blown recession hitting GDP at -0.7%. In dollar term it could be a lot more.

Labour Dept fabricating NFP numbers to maintain high USD currency. Approximately 50% jobs said to be created are fake. Things may be starting to unravel. Bloomberg reporting in last hour trader caution now impacting the market. The façade is beginning to slip.

The October 2022 and august 2023 double bottom has held this week.

Https://www.marketscreener.com/quote/stock/CENTAMIN-PLC-9730915/ratings/

Surveyed not survived !

400 companies are survived and a lot of seasonal adjustments are made because of holidays. Apparently Barbie and Oppenheimer raked in $8B in theatre takings apparently. Beyonce and Taylor swift concerts selling out probably aided by students debts repayment suspensions. Pharmaceutical prices were jacked up in August. If the FED are going to hike until they stop people going out completely seems a ridiculous club to hammer down services. In the meantime manufacturing is hammered for the 10th month in a row. The housing sector is slowing down fast. If they want a soft landing they need to look hard at the data. It has been a long time since two good movies were launched and if Biden pump primes young people to spend they will do so. With manufacturing now getting hit with higher oil prices, I think it is pause in September on rate hikes as they follow Canada's rate pause. I also think the FED are seeing what unions will do with wage claims and if they are high, the rate rise is more likely at the next meeting as somebody else gets the blame. Tony

Steve and other readers,

You are underestimating the innovations at Centamin such as a reduction of $120M in costs thus far and $30M more being delivered in the coming months. As a consequence the AISC has not changed in the last 12 months. There was a cost increase over 2019 by around $300 an ounce but the gold price was $1500 an ounce in August. The profit range was $600 an ounce say and today it is about $650. Production is likely to be is up say 10% in that time frame but a lot of benefits are unseen because of the additional stripping.

Tony

Down 1.77% in the last week with 0.69% fall today. USD 124.45 to pound. The income earned here is USD. Forecast suggests that pound is to decline further. Tanzania shilling has devalued 7.8% against USD and has a lower (real) inflation rate of 3.3% of which it fell 0.3% last month. Both are ignored tailwinds for Shanta Gold.

HoC outperforms Centamin 30% during 2023 on the SP. Annual difference to HoC is plus 40%.

Past PE rate is 17 for CEY and 105PE for HoC. Forward PE rate for Centamin is 7.5 and the rate for HoC on its balance sheet is looking dreadful after a loss of 9 cents per share at the interims. So how can Centamin with no debt $150M in the bank and higher production growth underperform a company with spiralling debt and declining production and a runaway debt of $220M and growing at a rate of $60M for the remainder of this year.

Https://www.centamin.com/assets/edx/

When we get the drilling results around Sukari is when it could get interesting. A couple of million ounces would be wonderful feedstock to the present or expanded mine infrastructure. 550,000 ounces would do very nicely as a new annual production target.