Centamin Share Discussion Threads

[casual47] 19/9/2018 10:19

There's easily an extra 50 million USD on top of free cash flow to play with.

[casual47] 19/9/2018 10:15

Astjgroom - you are wrong, luckily.

It's company policy to only keep $250-300m cash. They have paid 100% of free cash flow before.

See for example:

"In July, we declared an interim dividend of 2.5 US cents per share, a 25% increase on the 2016 interim payment. Following another year of strong operational and financial performance, including paying out US$112m in profit share, the board of directors are delighted to propose a final dividend for 2017 of 10 US cents per share, for approval at the forthcoming Annual General Meeting on 26 March 2018. This represents a proposed total dividend of 12.5 US cents per share, full year pay-out of US$144 million, which is equivalent to approximately 100% of our free cash flow in 2017. This level of payment is consistent with the Company’s policy of returning cash in excess of US$250-300m that is not required for growth projects."

[astjgroom] 19/9/2018 10:09

Casual they always talked about 30% of free cash flow for divis, not topping up, imho, hope I'm wrong

[ukgeorge] 19/9/2018 09:17

Fangorn, do you know me :)

I won't be 70 by 2050 if I make it that far..... I'll move into the slow lane

Casual I hope you are right ref the dividend. Although I think the market expects it to be cut.

[fangorn2] 18/9/2018 20:56

juju4418 Sep '18 - 15:28 - 27838 of 27840
0 0 0
Anyone for 2050 ?


Pretty sure you'll be dead by then! As will UKGeorge!

All that living in the fast lane....:)

[casual47] 18/9/2018 19:45

In my opinion:

Total 2018 dividend will be around 12.5 cents (inclusive of 2.5 interim).

Reason: even with the lower gold price and lowered guidance, the BOD's often and clearly stated intent of only holding maximum between $250-300m cash and returning as much cash to shareholders as possible means that they can easily make up for any profit reduction by topping it up with e.g. $50m from cash reserve, which would still leave at least $250m in the bank.

Even at lower gold price in 2019, CEY should be able to maintain that dividend or even improve based on anticipated higher grades (=lower costs) and expected higher output for 2019 (more in line with their original guidance for 2018, so around 580,000 oz).

Taking the above into account, the shareprice @0.95 is a steal! (12.5c is about 9.5p, so 10% return at 95p)

[ukgeorge] 18/9/2018 15:44

don't be silly we will all be using bitcoin by then

[juju44] 18/9/2018 15:28

Anyone for 2050 ?

[ukgeorge] 18/9/2018 12:34

maybe 2019 or 2020

[edjge2] 18/9/2018 12:32

when gold come roaring back cey will too, after fomc maybe

[garycook] 18/9/2018 05:01

Roland Head | Monday, 17th September, 2018 How many of today’s dividend stocks will still offer an attractive dividend in 15 years’ time? One company which I think could have a fighting chance of maintaining its dividend over this period is Egypt-based gold producer Centamin (LSE: CEY).

The firm’s Sukari gold mine reached full production in 2014. Last year, the company reported gold reserves of 8m ounces at Sukari. At the current production rate of about 500,000 ounces each year, that could support 20 years’ production. Even taking a more cautious view, 15 years seems a safe estimate to me.

I think it’s fair to view this company as a production business which will continue to return a substantial share of its profits to shareholders.
Out of favour – the right time to buy?

Gold is out of favour at the moment. The price of the yellow metal has fallen by 11% from $1,350/oz to $1,195/oz so far this year. Gold miners’ share prices have dipped too.

Centamin’s share price has fallen further than most. The stock is down by nearly 40% so far this year, mainly because management cut its guidance for 2018 production in May. I share my colleague Graham Chester’s view that this is a short-term blip.

I’m more interested to note that the shares now trade on a trailing price/free cash flow ratio of about six. That’s very cheap, in my view, especially when it’s accompanied by a net cash balance of $282m. This cash pile covers roughly 20% of the group’s market cap, so it provides good support for the dividend.

Although the company is still involved in two ongoing court cases in Egypt, my view is that these are now unlikely to cause major problems. Indeed, I think the shares are priced to buy, on a forecast P/E of 13.3 and with a prospective yield of 5.1%.From Motley Fool I make the current yield around 10% at the current 95p share price ?

[rovi70] 17/9/2018 15:42

wants to blow!

[jimbowen30] 14/9/2018 15:51

Exactly Shieldbug. It was this quote of his that sticks in my mind:

"If you don't own gold, there is no sensible reason other than you don't know history or you don't know the economics of it."

[gymratt] 14/9/2018 08:46

Bought some RRS @ £46.80 , another good Goldie recovery play imo. Blackrock have been piling in there.

[juju44] 14/9/2018 08:41

Remember recovery sharp when the bear dies

[gymratt] 14/9/2018 08:35

£1 today? :@)

[bashor] 14/9/2018 07:45

BlackRock seem to think the tide will turn

[edjge2] 13/9/2018 14:39

Brakes are off. FTSE coming to terms with Brexit and gold on 1211, don't know how long this will last but my cap[ital evidently too late but will see on Oct 1

[ken tennis] 13/9/2018 12:48

Casual im going for southern France for a wee £10 ew

[jimbowen30] 13/9/2018 12:16

Re Dalio - yes he's said previously he owns physical bullion and this is one of the smartest and most successful investors ever.

[fangorn2] 13/9/2018 11:26

@Shield.

Indeed. Here's hoping.

When the debt bubble finally bursts it will make Lehman look a walk in the park.

[ben750crow] 13/9/2018 11:26

What on Earth happened to this thread? Talk about a train wreck.

[shieldbug] 13/9/2018 10:41

Fanghorn - The Dalio view of the future is a big buy signal for gold. Sounds extreme but he is probably right, Trump has previous in spending other people's money and walking away from the mess.