Medusa Share Discussion Threads

[cyberbub] 10/2/2016 23:15

Very useful thanks Bomber. Given the risk they are taking in a relatively illiquid stock, you would think that over a year or two Ruffer would be targetting at least a 2-3x on their investment, with potential for substantially more if gold moves back into a new uptrend.

[jimbo55] 10/2/2016 13:46

Ruffer are pretty shrewd cookies. Had my own and some family money in the total return fund since 2009. It's been a solid steady Eddy performer. Gives me confidence that they've invested in MML.

[chipperfrd] 10/2/2016 12:54

Thank you Bomber12.

[deka1] 10/2/2016 11:37

Thanks Bomber13,good info into the goings on.

[tightfist] 10/2/2016 11:19

Hi Bomber,

Thanks for your analysis of Ruffers moves, I had looked similarly and directly associated their pause/stop in buying with Robert Weinberg's resignation. It's reasonable to assume that Ruffer met Weinberg and Robert Gregory during last September. Their first purchase was 6 days before the PI meeting on 8th October; RG had been here sufficiently long to enjoy the Rugby and flew back to Oz two days later.

After RW's resignation Ruffer must have surely have been in communication with MML to gain confidence and enable them to resume buying, which is indeed reassuring. I suppose they stopped buying once they had accumulated sufficient stock to just trigger a regulatory announcement of their new position.

Nice work, but also helpful to us longer-term PI's.


Cheers, tightfist

[bomber13] 10/2/2016 10:14

What is quite significant , and at the same time reassuring , about the Ruffer stake is that although the 10.4m shares were accumulated between 2nd October 2015 and 1st February 2016 , there was a noticeable gap in their buying between the end of November and the 6th January , as tabulated by the ASX annexure .

If you recall , Medusa had a fatality underground announced on 19th Nov , the reappointment of Roy Daniel on 24th Nov and Rob Weinberg's resignation on 1st December . One suspects that these events plus the CEO situation might have prompted some contact from Ruffer with Medusa at that time , and hence the deferment of buying stock . Whilst Ruffer recommenced buying on 6th January , it wasn't until 22nd January that we were updated on the CEO situation .

The Medusa quarterly duly appeared on 29th January , and a few days later Ruffer stopped buying .

Ruffer spent around A$3.8m on their 10.4m shares , an average of 36.5c , and around one quarter of the value of their purchases occurred post 6th January .

[tightfist] 09/2/2016 22:28

Hi Justin,

Thanks for your assessment. Sorry I wasn't clearer - I wasn't actually intimating that Ruffer will now get out, MML will likely end up being a heroic investment for them, especially as they acquired some of their stock after the price was marked-down due to the CEO/COO saga. Indeed, those of us who topped-up in the last ten weeks may ironically also benefit from that situation - Risk vs Reward!

My professional life was all about consistency and quality of leadership, and it is that aspect that skews my view. I saw quality in RG, I don't see quality in the circumstances/achievements directly attributable to AT over the past two years; accordingly I won't rest until I see a well-founded CEO appointment and a complementary management and Board structure and Chair.

It is those aspects that will largely determine how far I run my investment in MML. In view of the undoubted potential, I would like to feel comfortable to stay in for multiple years - I have been in for eight years and would prefer to stay another eight. If Ruffer in conjunction with others became activist, so much the better.

I hope that's clearer. Cheers, tightfist

[eintracht] 09/2/2016 20:39

And you can guarantee Ruffer will have first hand knowledge of the ongoing situation regarding the CEO and COO. Nobody makes an investment like that without having direct (legal) contact with the company.

[justinjjbuk] 09/2/2016 19:48

tightfist

I don't think Ruffer will do a U-turn any time soon. As I've pointed out, for an institutional investor to go into an illiquid small cap like MML is a long-term commitment. Managing this type of investment is like steering the Titanic not a speed boat.

Ruffer has over 10 million shares. MML daily volume is now up over 1 million, but it would still take Ruffer 2 months to come out of its position (given they can only take a limited percentage of daily volume).

Although having no COO may not be in the price, having no CEO is already fully discounted. So actually getting the announcement of a new CEO will be a positive catalyst sometime over the next six months. And for the time being, the rally in gold is making all management issues secondary. At the current gold price, MML will be a cash monster.

True, we have seen institutions like Van Eck come into MML and then come out again, but that process had its own long-term dynamic. Van Eck goes in, stock slumps, Van Eck manager who made the MML investment decision gets beaten up, Van Eck comes out: the whole cycle taking about a year.

I think Ruffer, having just built its position, will sit in the stock and enjoy the ride. The manager who put Ruffer into MML will have averaged in below the current price. So at the minute he is bullet proof. He may not yet be doing a victory lap, but I think he will be feeling pretty smug down the pub with his colleagues on a Friday night in having timed the gold rally impeccably by getting a decent position built in a small cap just before the gold market rips.

Would take a lot more than worries over the COO to dislodge Ruffer IMHO.

Justin

[cyberbub] 09/2/2016 19:23

Surely Ruffer wouldn't simply dump their hard-accumulated holding? The management may be a bit unclear at the moment, but I would hope that the continuing ramp up in production would be telling it's own story. I don't think that there any suggestion that the positions won't be filled soon enough?

[tightfist] 09/2/2016 09:58

Justin,

Your speculation (#35724) regarding RG certainly threads together the scant info we have. I am still curious about the onset of this year's 15% salary cuts (announced September)and whether that was set-up as a prelude to what happened afterwards.

When I met RG and RW in October I got the firm impression that they got along together pretty well; (as you mentioned previously, presumably we have them to thank for getting Ruffer on-board).

When Goldminer met AT a month later I get the impression that, as a bean-counter, wage deflation (and local mining unemployment) was foremost in AT's mind. Meanwhile, RG had added massive value to both MML and his CV - my guess is that divergence lead to Robert Weinberg's resignation (as chair of the Remuneration Committee).

I also strongly suspect that RG was looking for the incoming CEO to have a seat on the Board.

Where next? One would guess that Ruffer feel highly dischuffed, having bought into something where the company representatives have now gone AWOL. That may become our opportunity in a little while?

Cheers, tightfist

[deka1] 09/2/2016 08:35

ABA hi could be mate,this stock can move so fast either way lol, depending .
MML is very illiquid , only 217 mil issued, iirc, so moves can be very large over one session, I was in mml from 2008 to 2011, sold and then bought back in, at much higher that it is now though,and I remember moves of 40-50% in a day on occasions.

[abacus23] 09/2/2016 08:12

deka1, that was some serious volume.

Perhaps we still have a seller and Ruffer are still buying?

As soon as the seller is finished ;) Whoosh!!!! (Well hopefully)

[deka1] 09/2/2016 05:27

Heavy vol last night , over 2.5 mil traded and up 2%

[4marlin] 09/2/2016 02:05

gm70,

no, not really.
my Monday order was not filled but I think today's has been.
dipped my toe in with equivalent of US$25,000.-
Will add if progress continues.

Thankyou for your posts.

[cyberbub] 08/2/2016 22:42

I have not been involved with what seems to be a long-running saga of the CEO.

Nevertheless the proof is in the pudding, and it seems that the production is rising very strongly, reserves are enough for 4 more years (plenty more resources being brought on), and AISC is likely to drop.

All we need is for the gold price to stay at or above $1150 or so... that is the risk here, nothing else is significant, for the moment anyway...

NAI

[goldminer70] 08/2/2016 21:54

4marlin I hope I haven't put you off investing in MML with my post.

I stand by everything I said but thats not the whole story. MML have spent if the last 3 or 4 years improving the infrasructure at the Co-O mine in the Philippines. I met with Andrew Teo in November and he assured me that they have a firm of recrutment experts to find a new CEO and because of the downturn in mining there are a lot of mining experts looking for jobs. He told me it would be done within a month. I thought it was optimistic but I am confident there will be an announcement fairly soon.
When it is the share price will make a jump with all the mining analysis's taking note. Then this will be followed with the next four quarters results making further increases.
The figures so far this year have been impressive
31st Dec 2015 share price was 0.355A$ or 17.45p
8th Feb 2016 share price was 0.51A$ or 25.07p a 43.7% rise (how many other shares have risen 43.7% in 2016??)
I believe when the appointments are announced and this years steadily increaes are announced the share price will be over 2A$ or £1 a 400% rise from here.

You were right asking Chip, but Chip, Justin and the other experts will concur with this view.
Goldminer70

[deka1] 08/2/2016 17:07

GM70, a cracking letter, hope you have better luck than me, I emailed them twice about the the last RNS omitting Rob Gregory from the list,
No response

[justinjjbuk] 08/2/2016 14:58

Pure speculation again, but I wonder if Rob Gregory may have jumped of his own accord for somewhere more remunerative.

With a successful turnaround under his belt he may have been approached by another outfit with an offer he couldn't refuse: something a little more tasty than his 500,000 options with MML at a $1 dollar strike price. I notice that a lot of the Aussie miners have been restructuring their management teams to bring in bear market people who are better at getting AISC down as opposed to bull market teams who just focussed on getting production up.

If so, he may be sitting out his notice period on garden leave. In such a situation, MML wouldn't need to put out a release as officially RG is still on their books; and Rob Gregory would say nothing in public in order to fulfil his contractual obligations.

[tightfist] 08/2/2016 14:58

Hi Goldminer,

Good for you taking action; I hope you get a sensible response in a reasonable timescale and that AT demonstrates that shareholders do matter.

You may have noticed that in the Q2 Report it slipped in that rather than being Executive Chairman (announced 12 November 2015), “Mr Teo has assumed the role of CEO on an interim basis until the appointment of a full time CEO”. Maybe that infers that Mr Teo is now drawing the benchmark salary of the outgoing CEO, at $627,000 pa, plus holidays (less 15% salary reduction for 2016).

Another role model for good practice (clarity and regular, consistent communication inc. video) is Mike Hodgson of Serabi Gold.


Chip,
You have referenced that things did not go well under a “mining man” CEO by whom you mean PH-B. It is surely notable that when MML did secure the services of RG as a focussed, communicative, competent “mining man” COO with plenty of commercial acumen, Co-O moved on in large strides in the space of only 14 months.
Until the last days of PH-B and the arrival of RG, “mine management” were seemingly content to operate a grossly over-staffed and crowded mine, and condone poor contract mining working practices, resulting in excessive ore dilution. IMHO, it would be a big assumption that during the last seventeen months the culture has been changed for all-time and that mine management do not regress.

Cheers, tightfist

[justinjjbuk] 08/2/2016 14:46

Stunning break out in gold. At least we can take comfort that this explosive move in gold will lift all boats regardless of how leaky they are.

Actually, while I agree that management communication has been abysmal, I am a little more sanguine about the outlook just like Chip.

Let's focus on the key facts: new mill up and running and doing what is says on the side of the tin, production at record, cash rising on balance sheet. Whoever comes in as CEO is picking up a tidy little business in robust operational health.

Compare our current worries with the chaotic state of the business 24 months or so ago (floods, mass sackings, a non-operational mill, production going down and so on) before Geoff came back and Rob Gregory turned around the business.

[4marlin] 08/2/2016 14:09

My view is that not having a technical director/similar is something that ought to be addressed as a priority.

[atlantic57] 08/2/2016 14:04

G70 That is a very professional email.

Unfortunately my experience of Companies is they generally treat private shareholders with Contempt so good luck.

Regarding the substantive issues you raise i would comment specifically that i lost a very large amount of money in the following gold stocks. Vgm, Norsman and
Ascot Mining.

In every case Management did not communicate accurately to shareholders .

However in every case the share price was constantly falling.

i think the share price is a good guide to all things connected with Management information.

[chipperfrd] 08/2/2016 14:01

4marlin

Yes - regarding the board. But I don't have any worries about mine management and the obvious progress they are making where it matters.

It must be said that GD was not a 'mining man', he was a Geologist. When they brought in a mining man as a CEO he proved to be very poor in that job.

[roguetreader] 08/2/2016 13:53

G70,
Good mail, hope you get a response, I'm sure you'll let us all know if you do :)
RT