Medusa Share Discussion Threads

[speedsgh] 23/11/2016 09:47

Chairman’s address at AGM 2016 -

CHAIRMAN’S ADDRESS - MEDUSA AGM 2016
24th November 2016, 9.00 am (Perth time)
Pagoda Resort & Spa, Esplanade River Suites (Pagoda Room A)
112 Melville Parade, Como 6152
West Australia, Australia.

Good morning everyone,

My name is Andrew Teo, Chairman of Medusa Mining. On behalf of the Board, I welcome you to the 13th Annual General Meeting of Medusa Mining Limited.
FY16 has been an eventful year for the Company, with several board and management changes, culminating in the appointment of Mr. Boyd Timler as Chief Executive Officer (“CEO”) of the Company in March 2016. The search for a CEO has been a lengthy, thorough and at times arduous process. The investment of time and resources into finding the right candidate is, in my view, a worthwhile one. We firmly believe under the stewardship of Mr. Timler, with support from the Board, the Company is well positioned to deliver consistent production results on an increasing scale.

The key to delivering this is the completion of vital infrastructure projects currently underway, in particular the E15 Service Shaft, which has become a linchpin to improving production. This being our number one priority, is to be completed as soon as possible, resulting in the removal of hoisting constraints at the mine, and in turn producing an increase in productivity and reduction in costs. In addition, the Company will continue to focus on the Level 8 definition drilling to improve our understanding of the Co-O resource at depth below Level 8 and mine life.

On an operational level, FY16 saw the Company produce 108,578 ounces of gold at All-In-Sustaining-Costs (“AISC”) of US$999 per ounce, inclusive of all cash operating, sustaining capital, project expansion (undertaken in the reporting year), exploration and corporate overhead costs. This achievement marks the highest annual gold production in Co-O’s ten-year history and is a credit to our personnel, especially those in the Philippines.

Having said this, we are mindful that until such time as the infrastructure projects in progress are completed and hoisting constraints alleviated, production output of the Co-O Mine will not run at full capacity. The challenge for the Company this year is to replicate FY16’s production results. This is achievable by managing a balance between the movement of production ore and development waste, while ensuring on-going infrastructure projects continue to progress toward completion. Accordingly, production guidance for FY16-17 is between 105,000 to 115,000 ounces, and is very much back-end loaded.

At the end of September, the Company released its latest reserves and resources estimates to 30 June 2016, for both the Co-O Mine and Bananghilig or B1 Deposit in accordance with JORC 2012 standards. As expected, when the model for the B1 Deposit was applied to a constrained pit shell there was a reduction in resource ounces. This mineralisation has not disappeared, rather, is available for re-inclusion upon reduction of OPEX and/or improvement of gold price. With respect to the Co-O Mine, there was a slight reduction in both reserve and resource ounces which reflects both mining depletion and perhaps more importantly, insufficient resource definition drilling for that period. This is purely a timing issue related to the Level 8 drill stations not being completed until late in the year, thereby pushing drilling into the next reporting period. From a strategic standpoint the Company’s focus is set firmly on the Co-O deposit and its near mine exploration potential, that is, to replenish mined ounces with new resources ounces at a minimum. As for Bananghilig, the Company is reviewing its options.

We are proud to be a responsible mining company with a strong commitment to local and surrounding communities. The Company, through its affiliates based in the Philippines, contributes significantly to the overall social and economic development within the region. Our host communities continue to support us, as we support them, through a large number of carefully targeted community programs as outlined in our annual report.

For those who are unaware, the Department of Energy and Natural Resources (“DENR”) in the Philippines conducted an audit of the Co-O operations in early August to determine if the Company’s operations complied with regulatory requirements of the DENR. Whilst no official notification has been received, I am happy to advise that on 27 September 2016, the DENR announced at a press conference in Manila, that the Company’s affiliate Philsaga was amongst a group of companies that had passed the audit and allowed to continue on-going operations at its Co-O mine.

In concluding, I would like to take this opportunity to sincerely thank all of our shareholders, my fellow directors and staff in Australia and the Philippines, and the numerous others in the finance community for their support over the past year.

Thank you

[augustusgloop] 23/11/2016 02:14

alquid122 Nov '16 - 22:57 - 36718 of 36718 0 0

Please forgive me but what benefit does whoever is holding the gold price down, get?

-------------------

Absolutely nothing at all.

To hold the gold price down means selling loads of gold.
So the paid gold bulls are trying to make you believe that those rich banks that own loads of gold are selling it off in order to make themselves poorer.

And people like chip have been saying for 10 years that the Western vaults are empty - but every year claim that they held gold down by selling tonnes of gold from these empty vaults.

But this year the vaults really are empty - so you should bet on gold going up now.

They have been wrong again and again and again.

Are they really providing you this service for free, or is somebody paying them to do it?

[alquid1] 22/11/2016 22:57

All

Please forgive me but what benefit does whoever is holding the gold price down, get?

Al

[chipperfrd] 22/11/2016 12:56

Well, the system will break at some point. It could well be now, although I think it more likely there will be another big downdraft - possibly when the COMEX opens in a few minutes - we will see.

[atlantic57] 22/11/2016 12:22

Chip,

i don't disagree with your analysis !

But my point is a simple one unless the gold price can sustain an upward trajectory
regardless of third parties who wish to suppress the price then it will be difficult for the juniors to progress.

[chipperfrd] 22/11/2016 11:57

Atlantic,

Given that the paper markets set the price. And given that there are still 677 tonnes of gold standing for delivery on the December COMEX futures contracts against just 64.8 tonnes registered for delivery. Surely you can see that every effort is being made (by providing more paper supply) to get the price down.

Similar situation with silver with 10,151 tonnes still standing for December.

Eight more trading days before those contracts start being due for delivery. It would be very surprising if there were not to be another 'not-for-profit' instantaneous dump of paper supply to force more Longs to cover. If not (and more unlikely!) there would need to be a serious amount of short covering - which, of course, would push up the paper price discovery.

Hence, the large difference between the COMEX/LBMA prices and the Shanghai physical exchange. The usual arbitrage levels have trebled recently, so there is a real strain within the pricing system.

Also, very noticeable since summer, is the rising levels of metal withdrawals from COMEX. This lost metal is having to be sourced from outside the US in order to replenish vault levels in the COMEX and creates yet another problem (particularly for silver) in obtaining quantities of PMs in size - possibly a reason why the US Mint has terminated all production of Silver Eagles very early this year.

Chip

[atlantic57] 22/11/2016 11:00

Well i may be completely wrong but gold is looking very weak at the moment does not
seem to have any energy to break out to the upside.

[nielsc] 22/11/2016 08:02

Gold price is India still holding above US$1400 and the SGE price for gold sits $17 higher.

The silver price on the SGE seems to be getting even further dislocated from the COMEX price. It has been over $1 dollar for a few weeks now and currently sits at $1.39 above the COMEX (both markets are open by the way)

Cheers,
Niels

[augustusgloop] 18/11/2016 20:15

chipperfrd18 Nov '16 - 08:34 - 36705 of 36712 0 0

But in spite of all the paper price manipulation, metal is getting withdrawn from COMEX.


In gold, 18.28t withdrawn from vault over November. YTD 41.15t withdrawn.

Chip

-------------------

Are these the same vaults that you were claiming to be empty a year ago?
And the year before that
And the year before that ................

[chipperfrd] 18/11/2016 15:45

iltl,

I hold 25 different PM stocks and keep particularly busy with the LSE-listed ones.

I have accepted that MML cannot begin to reach full potential from Co-O until after the service shaft and other mine improvements are made. Hence I find little reason to spend time on the stock, or this board, unless there is some specific new info to discuss.

Time is a valuable commodity and I just don't have enough of it to spare!
Chip

[ilostthelot] 18/11/2016 15:08

Thanks for your reply chip. Unloved and undervalued and very quiet bulletin board. Probably a good time to begin averaging down rather than selling up.

[chipperfrd] 18/11/2016 10:49

iltl,

I use exactly the same valuation method across all producers. Basically an amalgam of financial performance, debt, M.I. resource levels and current PM prices.

For MML that currently comes out at A$2.59. So nothing in that for future production growth and the likely projected improved financials. So it represents (to me) the current valuation gap.

One can then apply various discounts for country risk, et al, but that all becomes very subjective. So I will just leave it there.

The method appears to work very well across a broad swathe of the larger producers so I am happy to stick with it and adjust my holdings accordingly.
Chip

[ilostthelot] 18/11/2016 10:18

I guess I'm looking for a reason to stay invested.. It looks cheap but could get cheaper and this development work they're doing seems to be endless but there will be a sweet spot again like back in the day when they filled the old Mill and made good profits.Will that time come again? I think yes and that's what I am here for ,the sweet spot. Where I'll be selling up.

[ilostthelot] 18/11/2016 09:53

Thought I'd run some numbers past you all. I'm not the best at this number crunching and valuing of companies so any input or other suggested valuations for MML is welcomed.

I'm hopeful for next FYI 17-18.
To produce 120,000 at an average gold price of 1250 and AISC. Around 950

That should give us $36 000,000 for that year with a multiple of 8 going on from that gives $288 000,000 or

A$390,000,00 so a 3 bagger from here and I'd happily take that right now.

Maybe I'm being to hopeful. The chart looks like it's going down towards the 40c or maybe even back down to the bottom.

[chipperfrd] 18/11/2016 09:03

Niels

Yesterday's paper dump was primarily after the London close so should show up in tonight's figures, but countered by Long closures - so difficult to make too much from the overall open interest. But I do expect that the Dec16 contract numbers will show a large reduction.

Last Friday was a big dump but started at 14:00 UK time - so will have been largely absorbed by the LBMA rather than the COMEX. And of course, the LBMA is totally opaque.

I get quite a lot of daily information from the Harvey Organ blog.

Chip

[nielsc] 18/11/2016 08:51

chipperfrd,

I am pretty sure that $10b dump was before Tuesday this week (it was last Friday - just checked). So it should show up.
It is annoying that there is a 3 day lag in the COT numbers reported tonight!

Where do you get the Dec16 contract outstanding numbers?

The amount withdrawn is certainly increasing. I liked this Craig Hemke piece which I posted previously.

Had to shorten URL as ADVFN doesn't like silverdoctor links seemingly.

Cheers,
Niels

[chipperfrd] 18/11/2016 08:34

But in spite of all the paper price manipulation, metal is getting withdrawn from COMEX.

So far 171t of silver has been withdrawn in November. YTD 1,431t has been withdrawn.

In gold, 18.28t withdrawn from vault over November. YTD 41.15t withdrawn.

Chip

[nielsc] 18/11/2016 07:57

Gold price in India holding steady at $1440 a troy oz.

Eintracht:

I think part of it is that the traders who never want to own gold are quite happy to buy and sell and make some money shuffling bits of paper around.

I am guessing that the COMEX manages to buy gold through gold miners who have hedged their production. The irony is they have hedged due to the downward forces the COMEX players sometimes apply to the COMEX gold price.

If you were an unhedged producer it would certainly make sense to be selling your gold to India. Producers would have to get their product refined though. Not sure what prices refiners are offering. No doubt depends on where they are located.

Currently the game is to dissuade paper holders on COMEX to take delivery. Sell their long positions so the bullion banks can reduce their short position. The COT report tonight should show the 8,000,000 oz dump last week.

Cheers,
Niels

[eintracht] 17/11/2016 23:08

I understand that COMEX are basically just trading bits of paper. MML are selling physical Gold. The two seem to far apart now so why is COMEX not just completely ignored and they can trade worthless bits of paper as much as they like ? Everybody else can just trade physical metals on a completely different platform. If they are just paying cash when someone demands deliver of physical Gold what is the point.

[nielsc] 17/11/2016 22:52

Charles,Although it does look like withdrawals are increasing.Http://www.silverdoctors.com/gold/gold-news/october-comex-gold-deliveries/#more-73556Why not take delivery as you can make good money selling it in to the east.Cheers,Niels

[charles clore] 17/11/2016 22:08

Because they are not selling physical gold. They are not in it to sell physical gold or silver. They are simply there to play with paper contract notes that substitute for and dictate the price of the real thing. If it looks like they are going to have to stump up the real stuff they quickly close their positions or if they are long they get offered cash instead. Relatively little physical ever leaves LBMA/COMEX.It's rigged

[atlantic57] 17/11/2016 19:36

Hi Dekal i really should become a pundit and start churning out newsletters
i Am getting newsletters now from people who were predicting just 2 weeks ago
that gold could be 1500 dollars an ounce by 31 December.

Now the same people are saying it could go below 1000 Dollars an ounce..

[deka1] 17/11/2016 19:08

And gold just falls another $15