Full year result, page-2

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shakattack

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12/08/14

07:03

Post #: 13802525
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Originally posted by Kinzu ↑

From half yearly report:
"The revised production guidance for the fiscal year to 30 June 2014, following production of 26,089 ounces of gold for the half year to December 2013 is now between 70,000 to 80,000 ounces at anticipated cash costs of US$400 per ounce."

Failed. They already revised it down to 70k-80k ounces and only produced 59,904 ounces, cash cost 418$. They even drew down their inventory to boost the gold sold as to make it seem like they reached their target. 65,943 ounces sold.

Unclear how much net profit/loss it will be but the cashflow is negative for the year. MML is NO low cost producer.

Revenue = 65943 x 1299 = 85.7m
We know the following, ytd exploration = 15.8m, Sustaining capital = 23.6m, Mine development = 36.5m
Admin should be about 8m (given that the half yearly shows 3.9m for half year)

Minus all that and you get 9.8m$. Wait... i haven't even taken out wages/ processing costs etc... which i don't know the exact figures. These costs are on-going as MML needs to have on-going mine exploration and mine development. This is very different to one-off expense such as plant upgrades.

It is no wonder MML's cash balance has declined despite it touting to be cash cost of 418$. About time they started to adopt AISC like other goldies.

June 2013 they started with 7.45$m. June 2014 they have 13.7m.

"With the current subdued gold price and the delay to the commissioning of the new Co-O Mill caused by the situation with Arccon, Medusa has been reviewing the efficiency of its operations and also its costs. As a result of this review, the Company has deemed it prudent to arrange funding facilities with two Philippine banks. The overdraft facilities available to the Group total Php600 million (approximately US$14 million) and to date the Company has drawn down Php120 million (approximately US$3 million)."

The above quote is taken from June 2013 quarter. The half yearly report shows they have used 4.8m of this facility. In addition they also had a capital raising of 34m.

This means MML burnt through (7.45+34 ) - 13.7m = 27.75m at a minimum as we don't know how much of the debt facility has been drawn (which adds to cash on hand).

Horrible horrible yearly result, no wonder Euroz's (MML's broker) and their associated entities ceased to be substantial holders recently.

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Totally agree with you on the analysis..but not on recommendation.

Cash costs c$400-500/oz
Capex - $30-40M (300-400/oz at 100koz pa)
Exploration $15M ($150/oz at 100koz pa)

AISC - $850-1050/oz

At higher production levels, the costs would obviously reduce

DYOR

MML Price at posting: $1.36 Sentiment: Buy Disclosure: Held
1 Upvote

0 Great analysis

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Full year result, page-2

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