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Shanta share price 9.95p. Gold price $1771. Annual production 67,000 ounces. Company amassing debt of $25M on mind build having to take out a small hedge position.

Shanta price 9.4p gold just over $1890. Annual production between 92,000-96,000. Company not in debt any more. Forecast to have $3M plus in the bank after paying out dividends by end of year. AISC costs also well down.

Absolutely absurd. Shanta Gold is so undervalued it is crazy.

The fire sale valuation of the company is 9.2p in which all reserve ounces are valued at just $30 per ounce and reserves in production are valued as low as $100 per ounce. and assumes no cash in the bank and no debt.

Centamin is priced 1p above its fire sale valuation price.

The precious metals miners have been totally hammered.

Last sentence

by instead of be.

The reason for no comments was that a lot of elements remain unknown.

Take a look at Lynas and Arafura and just ask what would have happened if the original plan was pursued back to construct a mine with funding from a Chinese bank in April 2021. Let us assume in January 2021 a share raise was done to commence a FEED study for the mine only. It would have cost if properly done around $15M and the share base lifted to say 210M shares. It would have required another share raise to deliver more infrastructure. So lets say it was now 235M shares in this scenario and the Chinese banks have advanced the money with conditions for some Chinese supply and construction begins in August of 2021. The mine build would have completed around 3 months ago. Initial ore would be generated at market bottom prices and the company would be delivering into a full blown recession which is due this autumn. The share price of Pensana now holding huge debt would have plummeted. The company would only be able to service interest debt and have to extend outwards the deadline of paying off the principle. Alternatively it would have gone bust unable to stem losses.

As to whether the much delayed delivery of a mine will arrive when the global market has changed is an unknown. The point I am making is that Covid-19 response by central banks and for that matter in China as well has changed the dynamic and revealed an impact we see in markets today.

In conclusion, the naysayers would have been proved right if the original pathway had been pursued. The irony is that all the roads that have not been fulfilled to date have left the company a chance to arrive into a market that will want the product. The current time is awful for the commodity sector. It may remain so for the intermediate future. Longer term, a depleted military, a growing robotic and AI industry, climate protection drivers may well stimulate a different demand outlook in two years time or it may not and populations are controlled be significant demand reduction policies.

Contrarian, I wish you would come back when it is lower please as you are meant to be a buy signal like when you went to town when it was sub 90p. Can you promise to come back much later so that everyone can get reduced price shares.

I posted this on the HZM board have a read of the August 14th report.

https://www.pmi.spglobal.com/Public/Release/PressReleases

Cowichan

It is a good question on what they actually own and I can only go what is listed as total assets. Usually leased items are listed as a debit in other company accounts that I have read. The real asset is the takeover value on a sale and those which have the ability to mine out the reserves with the available equipment are worth double than having a reserve based in Doropo that has no current operational mine. The key question is whether Centamin has 8 million ounces in reserves and has not falsified JORC data. I believe that Centamin staff would not be so stupid as to do such a thing. I have assumed the figure for resources recovers any reserves lost as recovery in mining and conversion from proven to actual so I priced the resources at zero. Hence my confidence that we are at a very low share price. Of course a disaster can occur that suspends mining and I contend that Centamin would do its utmost to prevent such an occurrence which can happen to any mining company. All the best Tony

HZM has generally followed the mining sector index since 1 January. The index has been falling since 1 August and belatedly HZM has followed it down. The index down 34% and HZM retreat at 17%. Hopefully we get a bottom formation appearing next week and things settle down. The main stock indices have also joined the pull back in the last few days.

Last not less

Now trading at 0.91 of book value less achieved in October 2022.

10p of the share price is cash in the bank.

1/3 of the value has been removed from the price peak of say 125p when gold was at 2080. $190 per ounce gold sold is off.

Company has over 11 months ensured 20% of all production is hedged at $1900. Without the hedge they have Centamin valued at -10p for a gold price at $1510 per ounce despite 20 year Sukari mine life profiled at $1450 as economic to mine. Moving from -10p to zero would be at $1570 gold price and the company was only worth its value in cash. Gold always has a value in the ground and let us assumed it is all mothballed and only a skeleton crew and a much reduced board remain.

8 million reserve ounce in Africa still has a fire sale value lets say $60 an ounce. This equates to around 42p a share. At the rate of decrease the gold price at Centamin on fire sale reserve price is achieved at $1760 gold price. So the rate of descent in value has Centamin at the lowest possible on fire sale at just another $130 drop on gold. The realistic lowest value with a working mine is of course $120 per ounce of which is the current price of 83p-84p. Centamin is now value at the top end of fire price range for all the plant and assets and permits that it owns. The occasions when the 5 hourly RSI is at 25 is rare. Centamin RSI hit 18 earlier. The weekly indicator is just above 30.

Go to 14 August report. No soft landing for European wide recession.

https://www.pmi.spglobal.com/Public/Release/PressReleases

Not sure if they have peaked, but certainly retreating overnight. Sections of the USA may well be shutting down parts of their workforce if interests rates continue upwards. A builder may keep a roofer and an electrician for example, but not all the labourers to lay concrete. Those kind impacts start coming through the real economy. Less skilled jobs get cut. We do have a little hope this morning and will see if it holds this afternoon.

25% of gold production hedged well over $2,000 an ounce is like half the production at $1900 if gold went to $1800.

Http://www.stockchallenge.co.uk/ftse.php

The correct link

Http://www.stockchallenge.co.uk/

Alert of third relegation place going to Fresnillo. I copy the link for investors to be aware of a drop out of FTSE 100 unless Fresnillo can get out of the stuka dive. A drop from FTSE 100 to FTSE 250 is not going to help. Hopefully precious metals being oversold to kingdom come might ease.

Cowichan

From the accounts it looks like Centamin pays $49M and the profit the company makes is around $9m or so which is about 18% margin after all their costs. it looks like a reasonable deal to me as they had no staff injuries on-site in doing all the work. If you want to cut margins tighter it can result with consequences as everyone is under far more pressure.

I was wrong to put a heading with your name in it and let us both aim to be our better selves on the board and cut it out.

As for other contributions, you are not the only reader and they communicate to a wider audience. Things like USA on 132% debt to GDP ratio with 20% of all tax income being paid now on debt interest and it is going up to 30% do have a relevance if Treasury rates stay where they are and fiscal spending runs on the current path. The flag of confidence shines on USA debt repayment until it doesn't without a lot of paper printing. A lot of patience is being tested here. We shall soon see how oversold they hit gold and hit Centamin SP. It is not influenced by whatever any of us write here. Tony

Steve,

Sentiment does drive stocks to extremes regarding valuation. My analysis gives a median assessment only. At some point Centamin will return higher when more of the unknown becomes known and the sentiment changes from bottoming territory. Tony

It has everything to do with USA bond rates increasing dramatically on FED talk of continued rate hikes.

My last comment was totally misinterpreted by Cowichan. I gave details of 184M from new investors that will probably appear in the 2023 annual report next year and what we got was his list of those who sold from his previous post. The reasons why institutions sell could be a variety of reasons like another part of their portfolio has got absolutely hammered and they had to sell other assets. It may have nothing to do with Centamin.

What we know is that 2023 interim report was 426M revenue. This was expected and similar to 2020 when they earned $828M Revenue for the entire year. The company July revenue will have taken Centamin up to $500M and I would estimated up to today it will have reached around $535M. If the company only received an average revenue price of $1700 per ounce for the remainder of 2023 and hit 465,000 ounce production target the Revenue would exceed $890M and beat those of 2020. 100,000 ounces is protected by a put at $1875 over the coming 5 months.

The company profits were $91M in H1.(21.46% of Revenue). Production is expected to be 22% higher in H2. It is likely that after 32 weeks of this year total profits are probably $116M. The put profits of 100,000 ounces (11 weeks production), should give $38M profits. So 95,000 ounces which is 10 /11 weeks production has an unknown revenue and profit. What is most likely achieved is $154M on what we know equals the entirety of 2021 profit results. Lets take a really low gold price at $1700 for 95,000 for the remaining 10 weeks of the year. It gives 161M revenue and around $21M profit. Company profits at that gold price would exceed those of 2022 by $3M. The company share price should therefore mirror the average of last year at 106p providing all mined out reserves were replaced. If nothing was replaced on the reserves the average share price would fall to around 100p. The company updates replaced reserves in December.