IMO This is a buy at these prices..AS LONG AS..the mill continues to run at 2000 tonnes per day..along with normal shutdown periods for mill maintenance etc.
Also..the question is whether the mining team can ramp up tonnes mined. The previous quarters have shown 103,028, 114,380 and 108,264 tonnes mined per quarter. A very good effort..but with increasing milling capacity due to the new sag mill they can really ramp this up.
In a 30 day monthly period..if you account for say 3-5 days of zero milling due to monthly maintenance and normal shutdown periods..then your going to account for strong production with 25 days a month. Thats if no other issues arise due to weather etc.
25 (days) x 2000 (Ore milled) = 50,000 tonnes or ore milled. Now they can only mill what they have mined..so the question is..will tonnes mined increase? They will get through any backlog of stockpile very quickly.
They have already provided reasoning as to why grades decreased in the Dec Quarter..I dont expect the head grade to stay as low as 4.51 grams a tonne.
Moving forward they cannot change what has happened in the past with not meeting forecasted guidance numbers..but the potential is starting to become evident. Management stated on the 28th of Jan that the new SAG Mill was operating at 2000 TPD and it is is some positive info.
In January we had shutdown due to weather..looks like they lost roughly 7 days of production.
For March quarter..making predictions..lets say we can achieve 73 days producing at roughly 1800 tonnes a day ore milled.
Your looking at..
73(days) * 1800(ore milled) = 131400 tonnes milled for March quarter.
essentially..if we receive a head grade of 5
Lets look at what we will get
(73 * 1800 * 5(gold grams)) * .87 (gold recovery)
We will have
= 571,590 grams. Turn into ounces.
571590/31.103
= 18,377 ounces produced for the quarter.
IMO I am being conservative. Management have advised the mill has been running at capacity of 2000 tonnes ore milled.
This stock can really improve or turn things around quickly. We just need to see what happens with the quarter. Its a nice position to enter the stock..this is why I'm now holding. What is everyone thinking?
Discuss the negatives..positives..cheers.
MML Price at posting:
$2.06 Sentiment: LT Buy Disclosure: Held
(20min delay)