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Now that PK is gone, what (who) is holding back the share price of CMM? Any thoughts?
12 comments:
Keith
said...
Short answer, CMM itself.
If only our interim CEO had released a news with July progress, mainly the tpd and grade, we wouldn't have seen this sell off.
There is too many unanswered questions. Why did PK leave? or was she pushed? or did she know something we don't know?
Investors don't like to guess.
Either you believe in the company and stick around to see a couple of quarters of progress, or sell now and come back when you see the proof. Simple as that, IMO.
I normally dont reply to the posts of some of the more simpleminds on Stockhouse .. but this is a reprint of my post today.. addressing a comment that 100 K oz production will not be achieved until 2013
Cheers all and have a good weekend
Assumptions are what make the stock market tick ... tock
The last info from CMM was: 770 tonnes/day at 5.6 g/tonne headgrade at the end of June. That production was from mining of 7 stopes. Rough ave = 110 tonnes /stope
In July 2 more stopes were being developed and Bedard was being mined ....
Assumming 2 more stopes in production = 220 tonnes
I must admit that .. .for reasons in the last post ... it is killing me not knowing what production was in July.
I have to think to myself .. If the numbers are good what would be the reason to not tell shareholders in hopes of boosting the share price.
One reason I can think of .. In all likelyhood .. Lamaque will have lost money in Q2 .. it would suck to have the price bid up based on good July production numbers only to have Q2 numbers come out later and dampen the fire.
Perhaps the reason - aside from having a more common approach to releasing information as stated in another post - is to show that yes .. Lamaque lost a few bucks in Q2 but will be making money in Q3 .. Thoughts ?
No one knows except senior management. Has anyone talked to Peter?
I think the market already knows that q2 numbers are not going to be great, or just break even.
But the important question everyone is anxious is whether there is continued progress with ramp up? Did the tpd increase or did it fall back like in June. (PK used the late delivery of the low profile equipment as an excuse).
So much potential with this company. I just hope they pull it off.
Anything is possible, but if a loss shows up in the Income Statement in Q2 or Q3 or Q4 or Q1`11 it will not be due to the Lamaque operations. The Lamaque operations will be capitalized until the first quarterly report of the first full quarter of Lamaque commercial production. That will likely not be until Q2`11, to be released August 2011.
Though, they may need to expense the Lamaque exploration costs immediately (unclear at this time) which would eat into the San Juan profits (as San Juan profits will be the only one reported in the Income Statement until commercial production is declared and reported).
Now that we have proof that Finskiy is injecting cash to make ends meet and likely to allow for development of the North Wall and key exploration targets, I no longer seeing cash as being an issue - we knew that this was the contingency plan all along, but one cannot confirm it will materalize until it actually does.
One of the (many) reasons the new CEO`s decision to eliminate timely monthly updates is disappointing is it makes it more difficult to assess if we have a chance of accessing the next C$9.0 million from the escrow account. Both July and August are key months, if we are going to include June in the 4 consecutive month requirement to access the cash. June was somewhat low so we need good months from Jul, Aug and Sep. If those months are good then we can get the cash at the end of September. If those months are not good enough then we have to toss out June and then end of October becomes earliest point. If July is very poor then end of November becomes the earliest point, and so on.
That extra cash can do a lot to expedite our development and exploration efforts.
In my opinon, it is an extremely poor decision by this new CEO to eliminate the timely monthly updates to the general markets. If he is doing so because other companies do not provide such updates then (in my mind) he does not understand the difficult history of Century and difficult recent history of getting Lamaque started. Century is not just another company. In my opinion, it is unwise to go longs periods at a time during start up within discussing progress.
I think it also represents a lost opportunity to tell the market about all of the wonderful things being worked on at Lamaque and San Juan. Even if July data happen to be poor, a lot of positives could have still been realized from a monthly update. It provides the avenue to discuss in details about direction (i.e. Bedard Dyke, reaching the North Wall, long-hole stoping permit status.....). Being a start up, people are not as interested in current numbers as they are in understanding what is being done to enable solid direction/progress of the operation.
In my view, Century would be wise not to touch the head office situation for another year (certainly not until they issue the audited YE financials in April 2011).
However, Century should rent a small office in downtown Toronto and immediately transfer Peter Ball (IR) and Rich (Corp. Develpmt) to Toronto. Hulley can still continue working out of Blaine and Lamaque, but fly to Toronto from time to time, when Peter needs him to be involved with major institutional meetings (that requires CEO involvement).
The branch out needs to be Toronto, as oppose to Vancouver or anywhere else. Toronto is the financing and investment capital of the entire world. Basically, the who`s who in the industry all have presence in downtown Toronto.
As mentioned, the rest of Century`s head office should not be touched for at least a year (logistics are likely very difficult and requires a lot of time to work out):
1) 10 member Vulcan modeling team and head office engineers: critical function to the success of Century. We cannot risk losing team members and continuity of the critical work and knowledge gained over many years (as many may not want to move, especially if everything is too rushed).
2) Corporate administrative staff (accounting, payables, receivables, technical experts, etc.): Attrition will be a major issue here especially with the staff not with high end pay (unlikely to move, espeically ones with family and property considerations).
3) YE financials: Already an issue with timely reporting. Losing key accounting staff due to head office move is not wise prior to the April 2011 issuance.
4) Shared Corporate staff with Tamerlane and Module: Solutions need to be put in place prior to uprooting. Century cannot take all of the shared staff and leave these 2 other companies with no support.
5) Century is officially registered as an American company: Legalities will have to looked into prior to moving everything across the border. As the very least, all of the staff will need to be aurthorized to work in Canada (via the permiting process, if qualified).
In an August 4 posting, Glorieux mentioned that he would be able to get those July figures like tpd, oz of prod, recovery rates etc later in the wk from PB over the phone. Perhaps when Glorieux post what he get soon, we will be able to do our calculations and assessments. Seems our needs may still be served even w/o a PR from the co. Oh yes, I shall leave the sp alone for the time being. Prefer to mind the mines's business and be a "contents" watcher. IMO, effect (sp) will follow cause(mine performance) and not the other way round. I urge patience. Strongly believe our time will come fairly soon.
Gold price had again broke pass US$1200 but gold stock investors are not exactly a happy lot including many of our CMM retail investors. It is quite obvious individual gold stocks are lagging gold resulting in a general depression of valuations across the whole sector. With gold at US$1200 and producers's average net out cost of around US$450-US$500, it is simple to deduce that gold producers are in general making serious money (at least have the potential to). Though surprisingly the market seems to have given this a miss, I feel fairly soon it will not. With the traditional weak gold stock months of June, July and August ending, imbalances will be corrected as all imbalances will eventually be. So either gold stocks will go up significantly or gold price will have to retreat significantly. I believe it will be the former.
12 comments:
Short answer, CMM itself.
If only our interim CEO had released a news with July progress, mainly the tpd and grade, we wouldn't have seen this sell off.
There is too many unanswered questions.
Why did PK leave? or was she pushed? or did she know something we don't know?
Investors don't like to guess.
Either you believe in the company and stick around to see a couple of quarters of progress, or sell now and come back when you see the proof. Simple as that, IMO.
I normally dont reply to the posts of some of the more simpleminds on Stockhouse .. but this is a reprint of my post today.. addressing a comment that 100 K oz production will not be achieved until 2013
Cheers all and have a good weekend
Assumptions are what make the stock market tick ... tock
The last info from CMM was: 770 tonnes/day at 5.6 g/tonne headgrade at the end of June. That production was from mining of 7 stopes. Rough ave = 110 tonnes /stope
In July 2 more stopes were being developed and Bedard was being mined ....
Assumming 2 more stopes in production = 220 tonnes
Bedard 20,000 tonne bulk sample over 4 months 20,0000/120 = 160 tonne/day
So ... doing some adding 770 + 220 + 160 = 1150 tonne/day
Dispite the promising ore grade of 5.6 over the last 9 days of operation in June .. lets use 4.6
and lets use 1100 tonnes/day
1100 tonnes/day x 4.6 g/tonne = 5000 oz/month 60000/year + 20000 from san juan = 80,000 oz
New low profile equipment on the way ... (getting into better ore grade .. greater efficiencies notwithstanding) North slope coming online.
Should be able to ramp up to 1400 by year end.
1400 tonnes/day x 4.6 g/tonne = 6400 oz/month x 12 = 77,000 oz/year + 20,000 from San Juan =
97,000 oz ave anualized production ... before 2011 ....
So .. the question ... is it 2011 or 2013 that we get to 100 K .. or somewhere in between
The stock market is all about assumptions ... earnings "Estimates" production "Estimates"
Q2 numbers and production results for July will be out prior to months end ...
Then old assumptions will have to be re-evaluated on the basis of new data
Mike
My comment on the interim ..
I must admit that .. .for reasons in the last post ... it is killing me not knowing what production was in July.
I have to think to myself .. If the numbers are good what would be the reason to not tell shareholders in hopes of boosting the share price.
One reason I can think of .. In all likelyhood .. Lamaque will have lost money in Q2 .. it would suck to have the price bid up based on good July production numbers only to have Q2 numbers come out later and dampen the fire.
Perhaps the reason - aside from having a more common approach to releasing information as stated in another post - is to show that yes .. Lamaque lost a few bucks in Q2 but will be making money in Q3 ..
Thoughts ?
Mike
No one knows except senior management. Has anyone talked to Peter?
I think the market already knows that q2 numbers are not going to be great, or just break even.
But the important question everyone is anxious is whether there is continued progress with ramp up? Did the tpd increase or did it fall back like in June. (PK used the late delivery of the low profile equipment as an excuse).
So much potential with this company. I just hope they pull it off.
Anything is possible, but if a loss shows up in the Income Statement in Q2 or Q3 or Q4 or Q1`11 it will not be due to the Lamaque operations. The Lamaque operations will be capitalized until the first quarterly report of the first full quarter of Lamaque commercial production. That will likely not be until Q2`11, to be released August 2011.
Though, they may need to expense the Lamaque exploration costs immediately (unclear at this time) which would eat into the San Juan profits (as San Juan profits will be the only one reported in the Income Statement until commercial production is declared and reported).
Porduction05,
I think we still draw some educated guesses from how much cash they still have after q2 compared to q1? No?
Now that we have proof that Finskiy is injecting cash to make ends meet and likely to allow for development of the North Wall and key exploration targets, I no longer seeing cash as being an issue - we knew that this was the contingency plan all along, but one cannot confirm it will materalize until it actually does.
One of the (many) reasons the new CEO`s decision to eliminate timely monthly updates is disappointing is it makes it more difficult to assess if we have a chance of accessing the next C$9.0 million from the escrow account. Both July and August are key months, if we are going to include June in the 4 consecutive month requirement to access the cash. June was somewhat low so we need good months from Jul, Aug and Sep. If those months are good then we can get the cash at the end of September. If those months are not good enough then we have to toss out June and then end of October becomes earliest point. If July is very poor then end of November becomes the earliest point, and so on.
That extra cash can do a lot to expedite our development and exploration efforts.
In my opinon, it is an extremely poor decision by this new CEO to eliminate the timely monthly updates to the general markets. If he is doing so because other companies do not provide such updates then (in my mind) he does not understand the difficult history of Century and difficult recent history of getting Lamaque started. Century is not just another company. In my opinion, it is unwise to go longs periods at a time during start up within discussing progress.
I think it also represents a lost opportunity to tell the market about all of the wonderful things being worked on at Lamaque and San Juan. Even if July data happen to be poor, a lot of positives could have still been realized from a monthly update. It provides the avenue to discuss in details about direction (i.e. Bedard Dyke, reaching the North Wall, long-hole stoping permit status.....). Being a start up, people are not as interested in current numbers as they are in understanding what is being done to enable solid direction/progress of the operation.
Exactly, couldn't have said it any better.
"Century is not just another company"
When will HQ rent some Vancouver office space? Aside from increased tpd,this might add legitimacy.
In my view, Century would be wise not to touch the head office situation for another year (certainly not until they issue the audited YE financials in April 2011).
However, Century should rent a small office in downtown Toronto and immediately transfer Peter Ball (IR) and Rich (Corp. Develpmt) to Toronto. Hulley can still continue working out of Blaine and Lamaque, but fly to Toronto from time to time, when Peter needs him to be involved with major institutional meetings (that requires CEO involvement).
The branch out needs to be Toronto, as oppose to Vancouver or anywhere else. Toronto is the financing and investment capital of the entire world. Basically, the who`s who in the industry all have presence in downtown Toronto.
As mentioned, the rest of Century`s head office should not be touched for at least a year (logistics are likely very difficult and requires a lot of time to work out):
1) 10 member Vulcan modeling team and head office engineers: critical function to the success of Century. We cannot risk losing team members and continuity of the critical work and knowledge gained over many years (as many may not want to move, especially if everything is too rushed).
2) Corporate administrative staff (accounting, payables, receivables, technical experts, etc.): Attrition will be a major issue here especially with the staff not with high end pay (unlikely to move, espeically ones with family and property considerations).
3) YE financials: Already an issue with timely reporting. Losing key accounting staff due to head office move is not wise prior to the April 2011 issuance.
4) Shared Corporate staff with Tamerlane and Module: Solutions need to be put in place prior to uprooting. Century cannot take all of the shared staff and leave these 2 other companies with no support.
5) Century is officially registered as an American company: Legalities will have to looked into prior to moving everything across the border. As the very least, all of the staff will need to be aurthorized to work in Canada (via the permiting process, if qualified).
In an August 4 posting, Glorieux mentioned that he would be able to get those July figures like tpd, oz of prod, recovery rates etc later in the wk from PB over the phone. Perhaps when Glorieux post what he get soon, we will be able to do our calculations and assessments. Seems our needs may still be served even w/o a PR from the co.
Oh yes, I shall leave the sp alone for the time being. Prefer to mind the mines's business and be a "contents" watcher. IMO, effect (sp) will follow cause(mine performance) and not the other way round. I urge patience. Strongly believe our time will come fairly soon.
Gold price had again broke pass US$1200 but gold stock investors are not exactly a happy lot including many of our CMM retail investors. It is quite obvious individual gold stocks are lagging gold resulting in a general depression of valuations across the whole sector. With gold at US$1200 and producers's average net out cost of around US$450-US$500, it is simple to deduce that gold producers are in general making serious money (at least have the potential to).
Though surprisingly the market seems to have given this a miss, I feel fairly soon it will not. With the traditional weak gold stock months of June, July and August ending, imbalances will be corrected as all imbalances will eventually be. So either gold stocks will go up significantly or gold price will have to retreat significantly. I believe it will be the former.
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