Centamin Share Discussion Threads

[zangdook] 02/10/2024 07:24

This is CEY. There are ALTN and CHIP and SHA and other boards where good news about that stock could be posted.Wrong board.

[busterhogdog] 02/10/2024 07:06

Right board good news

[zangdook] 02/10/2024 07:04

Wrong board

[busterhogdog] 02/10/2024 06:39

Good results today.From Altyn gold Cash cost of sales up about 10% year on year, $17.5m v $15.9m, but pleasing to see admin costs reduced to just $2.5m for the HY, pretty low and below my expectations.A lot of the EBITDA has been swallowed up by increases in inventory and movements in trade receivables/payables so doesn't yet reflect in the bank balance.The EBITDA of $19.6m is excellent and the real figure to focus on. Take off the $3m finance cost and $2.5m admin and that's a very healthy $14.m in cash generation before before expansionary capex and tax - can't see any 'tax paid' in period?It looks like the $58m of debt could be paid down in under a year at the current gold price if the plant upgrade does what it says on the tin!

[beeezzz] 01/10/2024 19:31

What is the final date for voting...?

[stevedaytrader] 01/10/2024 15:34

the share price will drop for sure if the deal falls though, and quite a bit- unless it falls through with a better bid of course. if no other bid it will drop a fair slug. the fear of this, however slight, made me sell as i would be way more annoyed at missing out on gain than losing a bit slug from this great gain. the thought of waking up to a dodgy rns would not be good. having said this, would be a great time to buy back in again, depending on the reason for the deal fail.

[1gw] 30/9/2024 19:09

I agree with that - the fact of the AU bid should increase the probability assigned in models to a future bid from AU or another company if the AU bid falls through this time.

The point I was trying to make was that the price action so far doesn't to me give any clear evidence that the market thinks failure of the AU bid (without a counter-bid) is more likely than it was last week. The narrowing of the discount to the bid price and the continued big premium to the GDX (even if narrowed somewhat because AU has been marked down against GDX) relative to pre-bid both to me indicate that at the moment completion of the deal or an improved offer seem to be viewed as more likely outcomes.

[elbrus55] 30/9/2024 18:49

Even if the bid does fail, there are good reasons to believe the share price won't go down as low as where it was before. (Even adjusting for gold price changes.) As an independent company it is worth more now because of the information within the original AU offer - ie an industry player thought it was undervalued.You didn't say otherwise, but possibly that is implied in your logic.

[1gw] 30/9/2024 17:30

I think the share price can give a reasonable indication of where the weight of market opinion is. And that to me suggests at the moment that your 3rd possibility does not have serious weight in models. I agree that enhanced offer and counter-offer could both be a factor in the narrowing of the discount, as could the passage of time and the publication of the CEY scheme document making the existing offer appear slightly more concrete.

At some point that may change. If AU's underperformance against GDX worsens, without the appearance of a counter-offer or credible suggestions that AU's offer may be sweetened, then the collapse of the AU offer may get a higher weighting. But in that scenario surely the immediate tell would be the CEY price moving down relative to the AU price and the GDX. At the moment CEY is still trading at a big premium to the GDX, relative to where it was before the AU offer.


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[elbrus55] 30/9/2024 17:18

Not really as there are at least 4 possibilities.AU offer proceeds as offered AU offer enhanced and proceedsNo takeover CEY continues as independentThird party counterofferWith so many possibilities and variables the share price cannot by itself mathematically determine the probability of AU offer proceeding on current terms. In fact it provides no information.Even in the simplified explanation you have 7 degrees of freedom.

[1gw] 30/9/2024 16:53

A 5-day chart seems to show very slight separation of CEY from AU today. It has actually moved in CEY's favour though which means the discount from the offer has narrowed and is now only around 1% (i.e. CEY trading at around 99% of the offer price).

So the market views completion of the offer as more likely and/or the market thinks a higher offer is slightly more likely now. What it doesn't indicate imo is that the market thinks the AU offer will collapse without a counter-offer arriving because if that were the case I would expect the CEY price to fall relative to AU.


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[elbrus55] 30/9/2024 16:41

Your preference for holding AngloGold or not seems largely unimportant as you would not be subject to any lock-in? You could sell Centamin the day before completion and get within a whisker of the offer valuation, or you could sell AU shortly after completion. You dont need to be exposed to AU for very long. The key thing is to get the max return/offer deal.One complication might be for shareholders subject to capital gains tax in their jurisdiction on realisation, but it is quite unusual to suffer that. Or anyone with a very large shareholding (>.$1m) which could be difficult to sell off in normal trading volumes.

[keyno] 30/9/2024 15:58

Ditto, GtheG.

[geckotheglorious] 30/9/2024 15:43

The fact we havent had another bid still says it all imo...
Are we going to?

I'm sceptical but if one materialises will be pleasantly surprised as dont want to hold Anglogold Ashanti.

[elbrus55] 30/9/2024 15:39

It is perhaps not that simple. The likelihood of Centamin management/shareholders going through with this offer which is now significantly less attractive must be reduced. Indeed, the whole thing may collapse However, there is now a greater chance that another bid will come forward to take advantage of AUs weakness. A counter offer of,say, 160 to 165p per share would have looked paltry a week ago , but it would now be a serious bid.Or Centamin can just continue by itself - not necessarily a bad thing in the long term.

[elbrus55] 30/9/2024 15:22

The equity component of the offer is now worth less due to AU getting caught up in galamsey issues in Ghana.There's a few possible ways this could pan out, but for now the headline offer is rather less attractive than it was before.

[1gw] 30/9/2024 09:55

What is the evidence for that Tnt99? The price still seems to be moving in lockstep with the AU price which suggests the market thinks it is highly likely to go through, doesn't it?

[tnt99] 30/9/2024 07:02

The market don't think this takeover is going through We need another player to enter the field with a better offer

[arlington chetwynd talbott] 27/9/2024 14:42

Not seeing a credible 100p scenario here. My theory is that if AU drop the ball someone like B2Gold will swoop in or at worst it will fall back to, say, 140p. I am hoping that AU will up the cash component to seal the deal. Once it clears and I can convert it into GBP (and that conversion settles), I will be reinvesting my dividend.

[arlington chetwynd talbott] 27/9/2024 14:33

Is that an answer to the question oilforex was asking?

[busterhogdog] 27/9/2024 12:36

Altyn results soon worth buying I have estimated a 50% increase in gold production once the new mill is commissioned, roughly from 10k to 15k oz per quarter. But that might be too low an increase. I’ve based the estimate on the history of mined ore, relative to the new plant’s capacity of 1mn tpa. However, the mined ore stats may be misleading. Tonnes milled have been significantly lower than tonnes mined in the past 18 months, as the company builds inventory for the new mill. For example, in Q2 2024 production was ca10k ozs from tonnes mined of 179k but tonnes milled of only 150k. So if tonnes milled reach 1mn tpa, that’s a 67% increase pq from the Q2 figures. So if output increases by 67%, that’s an annual figure of over 65k ozs, not the 60k ozs I had assumed.

[oilforex] 27/9/2024 11:26

When's the vote?

[elbrus55] 27/9/2024 05:07

If institutions have concerns then you would expect them to let management know - privately or publically. For example, they might say they would prefer a greater cash component.Not sure why they would commit to anything formally before the vote on a fairly straightforward takeover proposal like this. No point shooting yourself in the foot. Even if they did so for some reason, such commitment would routinely lapse in the event of a counterbid.If a second bidder comes forward then those takeover code rules kick-in which should help to protect shareholder interests.

[1gw] 26/9/2024 19:43

The point of the AGM resolution numbers was that Centamin appears to have a slick IR operation that can turn out 70% of the share capital for an AGM vote and get 95% of it to vote even for the more contentious resolutions such as disapplication of pre-emption rights.

So if you want to defeat the takeover resolutions that's the organisation you're up against. If you assume that at least 70% of the vote will turn out for the takeover vote then you've got to get 25% of that 70+% to vote against - so you're aiming for say 20% of the total share capital to stand a chance. I don't think that can happen unless you have some institutional backing - and in which case the relevant institutions will presumably take the lead.

Given there were no institutions named as having already committed to backing the deal when it was announced I think we have to assume Centamin was confident the deal was good enough to sell to institutions after it had been announced. There could also be an element of trying to flush out a counter-bidder which is perhaps more likely if potential counter-bidders don't see that some of the bigger holders are already committed. And there might also have been some fear that deal news would leak into the market if they canvased major holders before announcing. If it comes off (i.e. deal completes or counter-bidder raises the price) that's pretty professional behaviour I would say. If it blows up in their face with institutions refusing to back it then it would look more amateurish.