I currently have no shares, that is entirely different tov having no interest. I wouldn't have spent as much time as I did going through the records if I had no interest.
Basically my numbers showed that this WAS a good profitable company in the past. Grades were higher, price of Gold was higher, and crucially cash costs per oz were lower (naturally because of higher grade).
The situation the company now finds itself in is where there is trouble. They are spending a lot of money on development that is really part of sustaining costs, they are running faster to stand still.
By now they should be spending capital on the Bananghilig Deposit processing plant according to plans from a couple of years ago, for further expansion, yet there is no possibility of that with the current situation.
A call for AISC costs is a must for the next AGM
I'll repeat this again asI dont think you fully understood what I was trying to get across with your reply, as there was a lot of info there. The take-away, relating to MML only..
"They are not making money, it is an expensive operation with cash costs growing due to low grade, and constant cap spending that should be put in sustaining costs but is capitalised instead, giving false picture of profitability.
Share market woke up to this and has marked it down accordingly.
They effectively made $740k for quarter, after slashing costs, some of which will have to go up in future for business to continue. Low POG and grade hurting company along with thin veins.
A cap raise is a distinct possibility if POG stays low and production falls at all."
Purchasing shares in this company, that has been portrayed as one of the lowest cost producers, and will weather the gold downturn, is a false premis. The shares, even at the current price are not cheap.
It has a market cap of $142m, yet is barely cash flow positive in the September quarter with costs slashed.
In the next couple of quarters, some of the costs, like sustaining capital are set to rise, to repair things in the wet season. Unless the POG rises dramatically, the company will not have the cash for it, or struggle at best. All future plans seem to be put on hold with the odd hole here and there, but nothing much happening on any expansion. There just isn't any money for exploration ($11m+/qtr in 2011, now $2.7 including underground at Co-O, which is really part of AISC)
I was looking to purchase when the price hit the long term support of 55-60c, (nearly there now), but having a much finer look at the details of where the money is going, it looks more and more like a money pit. The thin veins and correspondingly low grades are killing the profitability. Things at this mine really are different now. It is not comparable to what it once was.
If in the future they mine wider veins and get the grade up to 8+ in the current price environment then things will change again, but 4-5g/t, not for my money, even at this bargain price.
MML Price at posting:
65.0¢ Sentiment: None Disclosure: Not Held
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