Medusa Share Discussion Threads

[deka1] 27/8/2015 12:55

CP I found this when I googled for Philippines tax and impairments

May as well be written in Greek as far as i'm concerned , but may be you can make head and tail of it lol



IAS 36 Impairment of Assets seeks to ensure that an entity's assets are not carried at more than their recoverable amount (i.e. the higher of fair value less costs of disposal and value in use). With the exception of goodwill and certain intangible assets for which an annual impairment test is required, entities are required to conduct impairment tests where there is an indication of impairment of an asset, and the test may be conducted for a 'cash-generating unit' where an asset does not generate cash inflows that are largely independent of those from other assets.

IAS 36 was reissued in March 2004 and applies to goodwill and intangible assets acquired in business combinations for which the agreement date is on or after 31 March 2004, and for all other assets prospectively from the beginning of the first annual period beginning on or after 31 March 2004

[cp42kx07] 27/8/2015 12:25

chip

Certainly if one adds back the impairment then NPAT looks like USD 41.5m giving a basic eps of USc 20 / AUc 26 (at 30/06/15 rate).

Despite the impairment being "non-cash" it still relates to previously capitalised expenditure and as such surely should be included in any historical assessment of the company's long term profitability? Personally I would appreciate a better (Mining Accounting For Dummies) explanation from the company of the 188m development and 68m P&E amounts (beyond that provided in note 13). Certainly the JORC 12 factor has been significant, likewise the PoG and increased costs.

Does anyone have an opinion as to whether the impairment will be tax deductible or has this already been claimed?

[adyfc] 27/8/2015 12:12

Those figures are shocking. This company has no future and you'd need your head tested if your still invested in these after reading those numbers. Same old same old, directors lining their own pockets.

[speedsgh] 27/8/2015 12:00

CP42Kx07 - yes, can now see that PA is also CFO


RV's summary doesn't shed a lot of light on how he actually earns his salary...
"Attorney Raul Villanueva was appointed an Executive Director of Medusa on 24 January 2013 following his recent appointment as President of the Company’s Philippines operating company, Philsaga Mining Corporation (“Philsaga”) in December 2012. Attorney Villanueva who has been the Executive Vice President of Philsaga since November 2011 was appointed President of Philsaga.

Attorney Villanueva who has Bachelor degrees in Economics, Military Science & Tactics, and Law has been a member of the Integrated Bar of the Philippines and an Attorney and Counsellor-at-Law since 1994. He brings a focused approach to improving the operating systems and professionalism of the Company, based on his education and several years of experience in law as well as managing companies and will further align the objectives of the Medusa Group of Companies."

[chipperfrd] 27/8/2015 11:40

Need to spend some time to work through all the numbers before getting a definitive set of figures for comparison with prior years.

MML have made a big impairment of assets following the JORC 12 revisions made last year. But such impairments have been common across the PM miners and are non-cash, even though they are written down in the income statement.

What is important is to 'look under the hood' and calculate adjusted EPS which would appear (from first glance) to be based on adjusted NPAT of c. +US$41.4m.

Will get back later when I have waded through all the detail.
Chip

[cp42kx07] 27/8/2015 11:21

Similar thoughts occurred to me but then I considered what PHB did for his almost $700k...

Isn't PA also the CFO?

As to what RV does, I'm not sure as to the extent of his local executive responsibilities - perhaps he is the company "fixer"?

[speedsgh] 27/8/2015 11:08

Does a Company Secretary (Peter Alphonso) really cost over $300,000 per annum? Seems rather a lot.

Can is anyone able to clarify what Raul Villanueva actually does for his $438k salary?

[cp42kx07] 27/8/2015 10:29

A massive "kitchen sink" impairment (IMO no bad thing). I can't quite figure out whether it has been required due to the reduced MC or JORC 12 (or probably a combination of the two).

Good to see debt being paid down.

The headline figures will doubtless terrify those who can't be bothered to look under the hood and with this in mind it seems a pity that management don't provide a more user-friendly discussion of the results (perhaps also a conference call).

[jfishy55] 27/8/2015 10:11

Full year report out - huge impairment charge from earlier in the year.
That aside, improved output, grade & lower costs.

[atlantic57] 27/8/2015 06:57

Blue thanks for your honesty.for the record I recall that you bought quality stocks.
I on the other hand had a lot of rubbish.so norsman gold and ascot mining both went bust.
Vatakoula effectively went best.

I actually sold two stocks MMl and cey. The losses I refer to were from the profits made
In the 2009 to 2011 period not my own capital.
You don,t need much of a gain to get back up there.

I'm sure gold will have its day in the sun but it could well go lower before that day.

[bluelynx] 26/8/2015 21:24

atlantic

I now need a 110% gain to get back to my 2011 peak, I now have a loss of 10% of my own capital! But I still live in hope that true market forces will get the better of the central banks manipulation in the near future, can they really raise interest rates - not with out crashing the Economy.

I recall you selling out of all your holdings several years back which was an excellent call, I wish I had done so in retrospect!

I am currently 100% in gold investments, how do I sleep at night you say? Well quite easily with no margin, i can afford to wait together with a hopeful out look, and telling myself it's only t money after all. Now tell me I am sane!

[atlantic57] 26/8/2015 20:44

Blue good to hear from you .
I think your strategy is sensible.
Gold will have its day !
I sold at the bottom and lost 90% of
My money not very clever .
Good luck!

[deka1] 26/8/2015 19:36

Thanks for your take guys

[cp42kx07] 26/8/2015 18:56

chip

I think that our mistake must be in attempting to be rational! Rookie error!

Certainly any attempt at an independent-minded, contrarian approach over the last few years has proved very expensive indeed with MML being the best (most costly) example of this for me.

A P/E of under 2 for FY15 is simply extraordinary.


CP

[bluelynx] 26/8/2015 18:52

The HUI has fallen from 134 to 105 and falling in just a few days! Are gold miners being shorted big style
Can anyone explain this disproportionately massive sell off to an already incredibly over sold sector!!!! I'm totally confused.

[chipperfrd] 26/8/2015 18:22

CP,

Yes, I agree, the comparisons are crazy!

Further comparisons with 2008 to now:

EPS was 1.7p for FY08 and 11.3p for FY09 (when the share price was already c. 100p)
Whereas the EPS for FY15 should be c. 14.8p with the share price at c. 23p.

Not much difference in issued shares - there were 188m in 2009 compared to the current 207.8m - so it's not as though there has been much in the way of dilution.

Average realised gold price for FY09 was US$834 compared to US$1,223 for FY15.

All-in costs were US$624 for FY09 compared to c. US$1,068 for FY15.

So even though MML were still expending non-recurring CAPEX over FY15 their actual margin over all-in costs for the year was only US$55/oz worse than FY09.

Revenue from 51.3koz of gold sold over FY09 was US$42.8m whereas MML sold 97.2koz and sale proceeds look to be around US$118.5m.

One could go on-and-on with these sorts of comparisons - they just don't make any sense (given the share price) if one tries to be rational!
Chip

[cp42kx07] 26/8/2015 18:16

deka

CNG (aka Kryso Resources) tried to list in HK but were unable (as non-producers, also some mention of Tajikistan being problematic). I investigated HKSE gold miners at that time (Feb '13) with the following results:

"6 active, producing HK listed gold miners (2099, 1051, 3330, 0246, 1818 & 2899.HK) with P/Es 16.22, n/a, 6, 7.85, 14.83 & 8.5 (average P/E 10.68)".

I believe that there are a few additional companies now listed and that the average P/E is more like 14 (but bear in mind that the average is taken from quite a small data set).

All in all I was quite excited at the prospect of the proposed HK listing and would be very keen on MML considering this option.


CP

[deka1] 26/8/2015 17:52

CP, hi as you know MML was listed on the TSX for period of time ,but the trading vol was pitiful, not sure if the NYSE would be any better , but perhaps an Asian exchange may be more fruitful ,the people there seem to like gold more than the Yankers, wadya think ?

[bluelynx] 26/8/2015 17:14

atlantic

Nice to hear from you, I'm resigned to losing money on gold investments hey ho! I will just hold and hope as it would be even more painful to sell at the boittom.!

BL

[cp42kx07] 26/8/2015 16:25

p.s.

If you think Gold is having a hard time of it, Silver is now almost sub USD 14 which makes the ratio over 80! Absolutely incredible.

[cp42kx07] 26/8/2015 16:19

deka

I'm sorry to say that we're actually some 18% below the Nov '14 price in GBP terms! If I recall correctly, the lowest that MML traded whilst in the UK was ~ GBp 23 in Nov '08 which equates to the current price...

This is even crazier when you consider that MML's income and most of it's costs are in USD and that the USD has appreciated against the AUD by ~ 21.5% (and furthermore that the USD has itself appreciated against the PHP by ~ 4%) since last Nov. During the same period production guidance has increased from 95k - 100k to 120k - 130k (although the PoG has declined by ~ USD 31 and AISC estimates have increased by ~ USD 60).

I've been wondering for some time now whether MML is listed on the most advantageous exchange. I think that AIM would be a mistake but perhaps NYSE could be better for a Philippines producer (even as a dual listing)?


CP

[deka1] 26/8/2015 15:01

Gold getting smashed again all the gains of last week gone, back to the 1080 mark imo.

[atlantic57] 26/8/2015 07:30

Blue Lynx at some point you will be judged to be sane.the problem is judging which point .
Gold has failed to preform when you would thought just about every single factor you would list has happened.Yet we are now roughly 40% down from the peak.

There will have to be some new factor which has not been considered.
Some of the old faithfuls ie Jim Sinclair have been wanting with their analysis and projections.
Yet they charge huge sums for thier words of wisdom.
One day blue you will be correct .

[deka1] 26/8/2015 07:15

Medusa now back to the November 2014 level.
Turmoil in the global markets but gold still falls,till gold price recovers significantly MML will languish at these levels.

[bluelynx] 25/8/2015 19:16

LOL......Well I'm pretty sure I'm mad but it doesn't make me wrong....gold miners are amazingly cheap.