I was fortunate enough to get into MML in the early days... i.e. April 2009... all of 7 months ago. MML finished 'best performing gold stk (after accounting for issues/options/rights etc) on the ASX for FY09. How could such a rich mine AND in production be below $1.00 mark at beginning of 2009? IMO it's because the 3rd world location deterred many investors. The fundamentals were/remain sound. What has changed is the perception that Philippines is safe to invest into.
What attracted me most about MML was the ultra-low production costs. As production ramps-up cash cost is now BELOW $200/oz! No mine in Oz can approach this figure. MML website emphasises they employ 99% locals. This approach is encouraged by Philippine and most/all 3rd world govts. It is usually a 'win-win' outcome. Local skills improved/cash into local economy... and cheap wages for mine.
West Africa contains some of the world's biggest gold producers. Anglos 'Ashanti' mine in Ghana is just one of several massive producers with many years of mine life. The greenstone belt that runs along border of Ghana and Burkina Faso then Ghana/Ivory Coast is a huge area with some world class deposits. Countless thousands of locals crush and pan gold by hand where the outcrops reach surface. They have no expertise to discover massive deposits lying only 5-10 metres below the topsoil.
Several ASX company's have excellent tenements in West Africa some of which are in early production or only months from initial production. Every 2nd week one announces new drilling results/new JORC etc. The trick is to find and buy into the pick of them.
For most small gold stks the multiple gains in SP have already been realised. AMX has gone from 8c to 54c in 12 months. PRU is far higher than its SP a year ago. So what to do?
One can't buy AMX and expect the SP to leap 6fold again in a year. But its deposits are so huge and so rich i reckon a new JORC will add 50%, an ann that work will commence another 50% and so on. Still decent rewards compared with 95% of ASX stks. Hence, i bought AMX recently at 52.5c.
GRY jumped 4% today. It has promise and although i don't hold it is def worth investigating. PRU is well known and has many true believers sitting-on decent profits but unwilling to sell as they sense much more to come. AZM doesn't appeal when its grades are a fraction of others.
Low prod costs mean these mines will still have exc profits even if POG drops to $800. Despite the political risk they are safer in many ways than a high-cost producer here in Oz.
What reasons do readers have for the African goldies they have in their portfolio? What makes your stk stand-out from the others?
