High production costs have been an issue for a long time and...

High production costs have been an issue for a long time and they are trending the wrong way. This throws doubt on plans or suggestions how to reduce them in the future.

Admin costs still running at an amazing $12-$14m pa are way too high for what is only a small business in EV terms. This indicates to me that they are not too focused on costs.

A major discovery would be a major discovery and would change things but it is unlikely.

Gold could go up or down. No doubt a big sustained rise would be very good for FML, maybe that was Shandong's bet. However, unlike other commodities, almost all gold ever produced is stored (including as jewellry) and traded from those stores, so annual production plays only a small role in setting the price, i.e. gold price could be sustained below most mines production cost indefinitely.

I say EV is "about right" now because FML is essentially an exploration/discovery play and gold explorers are having a lot of difficulty finding highly attractive new deposits. GRY as just one example has an EV well under $100m now and far far better discovery prospects than FML. What substantial EV can you place on FML's production assets when costs are so high including ongoing Admin and Development costs? EV is based on risk adjusted positive cash flow...red ink does not make for strong EV.

I used to hold FML but sold September 2011 when their continued "over promise under deliver" on costs got too much for me. It seems to be the same pattern still: weak actual performance always countered by true believers hope that turn around about to happen. Yes, many other gold producers have had similar problems but FML at top of cost curve so getting really squeezed.

One thing is clear though, they would be flat broke now but for the Shandong or some other major cash injection.

Which is why it seems to me there are now two hopes to stop the share price slide: gold price spike and/or major discovery.