Production 21k oz up from 17.6k oz in the previous quarter in line with guidance from GD in his video interview in September and company guidance.
Maintaining guidance of 40-45k oz for H1.
Q1 was cash flow positive as GD was hoping in his video interview. Cash $15.5 million. Prev $13.67 million. So $1.8 million net cash generated in the quarter.
Creditors to be repaid $5 million in Q2. This will reduce bank borrowings and/or trade and other payables. It is very unusual to make an announcement of this kind. Maybe it has been done to indicate that Q2 is expected to be significantly cash flow positive and there is no likelihood of a capital raising?
Cash costs reduced to $382 vs $431. Reporting AISC here is long overdue.
The new shaft to be built, probably next year, is to be funded from cash flow.
Recovery 92% vs 85% with possibly a further slight improvement possible in future.
"L8 Shaft upgrade is planned for 21 December 2014 to 13 January 2015 to increase the combined mine haulage capacity to approximately 60,000 tonnes per month."
So this will impact production for 10 days in Q2 and 13 days in Q3 but this is Xmas and New Year holiday period and the other shafts will get extra use so should not have a serious impact, hopefully.
Head Grade 5.02 g/t a slight improvement on last quarter but going in the right direction.
Geoff Davis was MD for 9 years during the rise of the company to a junior producer of 100k oz/year with prospects of doubling or trebling this output both from an increase in production at Co-O and from the discovery at Bananghilig. He has returned from retirement to assume the MD position again only since September 1st so these results represent only the first month of him resuming control. There are a lot of initiatives in train that will take more time before they are reflected fully in company results.
MML is now lowly rated due partly to the previous CEO who resigned in August who had been an unremitting disaster in every way as well as a large dose of ill fortune. The sp has been hammered unrelentingly for the past 3 months (approx $1.60 to 71p) to a level that does not reflect the progress made in these Q1 results or future progress that can be expected building on Q1 as the base for the turn around.
MML Price at posting:
71.0¢ Sentiment: Buy Disclosure: Held
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