Still under valued, page-15

DSD

Short answer is yes to the first question. But I would first want to feel sure that the USD POG was bottoming, or would soon bottom, and that in combination with making some judgement about their cost/production levels would help form an opinion about their value. Since I have felt for a long time that the POG would head back down to around USD1000 and their AISC were near that level there was no urgency for me to get in. Obviously I regret not having bought MML last year near its low and riding the share price up like I managed with other goldies. MML doubled in price as did many midsized producers. Since I now feel (perhaps wrongly) that the POG could head under USD900 I have less of a liking for MML given that they have not fixed up their operations to survive really low gold prices - perhaps they will succeed in time. I hope so.

A decision to buy the shares of MML would have be balanced against alternative spec plays so I would be reviewing at the time what was happening with the other goldie producers, and the need to diversify my portfolio. But my main consideration would still be whether MML could survive low gold prices.

In relation to your second question, it could go all the way down to zero value for shareholders. If MML do not get their costs down enough that is a possibility. In addition as the share price is driven lower there is increasing fear of the need for a capital raising - the lower the share price goes the more shares will be issued, eg TRY had to issue around 100m to raise $35m? recently and increased the number of shares on issue by 50%.

Given the strong downtrend in the POG at present there is really no point in holding goldie shares, but if you do then its necessary to have plenty of cash on hand to be a buyer near the lows and benefit when the sector rebounds. I expect that finding the market will not be easy.

Good luck.

loki (I am of course just speculating)