Kinzu,
In my view it was cheap at A$1.30/share, so clearly I therefore think it is much cheaper at A$0.71/share!
When the market throws up price discrepancies is surely the best time to take advantage. So it was back in 2008 when some really tasty opportunities opened up as the market tanked. Of course, one needs to be clear as to underlying value and that is always a matter of opinion.
Not sure why you think MML need a capital raise. They have a US$15.9m surplus of working capital on their FY14 figures and their net margin was 36% over what was clearly the poorest year in their history. That US$15.9m is after allowing for their short-term debt of US$7.132m which is unsecured and at c. 4%, which is not too onerous.
Of course we do not know exactly how much they will have paid out for Capital works, Development and Exploration over the September quarter, but we can make some rough estimates:
With 21,018 oz sold at an average of US$1,276/oz, revenue would be c. US$29m. Over FY14 their operating margin was 58%, so OPCF is likely to be c. US$16.8m.
Development is likely to be in the range of US$8-10m, based on the last two quarters, although cutting the cost of 1,000 contractors from that area of mine operations is likely to favour the lower end of that band in my view. Perhaps an estimate of c. US$9m is a reasonable compromise.
Exploration expenditure has remained in a slow downtrend, so US$3.5m looks a reasonable figure.
So, an estimated cash-In of US$16.8m less an estimated US$12.5m cash-Out on Development and Exploration leaves c. US$4.3m for Capital works without using existing cash of US$13.1m at the start of the quarter.
Capital works was US$2.6m over the March quarter but shot up to US$9.4m over the June quarter, so I have no real suggestions as to their September outlays for this item. I had thought expenditure on plant and equipments were largely complete for the expansion.
So my conclusion is that there is no immediate requirement for fresh capital to be raised and, in any case, their low level of borrowings would imply that a short-term overdraft facility would be readily available if required.
As to the ASX200, whether they remain in it or not is hardly relevant to their operations and earnings. These are my focus in respect of valuation, not what a volatile market may set the SP at. If it goes lower then, on a longer-term basis they become even more attractive. I don't try and pick bottoms or tops!
CPDLC
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