Medusa Share Discussion Threads

[atlantic57] 23/2/2016 13:39

One positive feature for uk holders is the weakening pound against the Aussie dollar.

Some commentators have speculated that this is due to:

a) The Eu referendum

b) strengthening Commodity prices.

[justinjjbuk] 22/2/2016 22:52

Think for pit life, we will see major near term catalysts for TRY on this as more drilling results come through and they upgrade resources so increasing Life of Mine (LOM) estimates.

[justinjjbuk] 22/2/2016 22:49

Yes, that's true. But I sense there will be a cycle here too. In the down swing, many of the Aussie names have given up LSE and TSX dual listings with ASX. If we do go into a major upswing on the back of a gold bull market, then their market cap and earnings will expand to a stage where they can reinstate their dual listings, so providing some multiple convergence. This just adds more rocket fuel to the roller-coaster ride! Of course, assuming POG behaves :)

[cyberbub] 22/2/2016 22:48

So GUY has an EV of about US$650M, whereas TRY is about $140M... similar AISCs, GUY is planning to produce about 50-60% more... but GUY also has a longer open-pit life... 8 years versus 3-4 years maybe...

Interesting that GUY are also reporting similar 'reconciliation' uplift in grades to TRY, about 30%.

[cyberbub] 22/2/2016 22:36

I will have a look into it Justin. I suppose the issue is that as pointed out by Chip, TSX miners seem to be rated much more highly than ASX or LSE...

[justinjjbuk] 22/2/2016 22:03

cyber

TRY: I think there was a lot of profit taking from the share issue, since its doubled since then. I actually bought into the weakness yesterday to build my position.

While you are tracking TRY, track the Canadian name Guyana Goldfields on the Toronto Stock Exchange: GUY:TOR. It operates in a similar area to TRY and, like TRY, is only just starting production. However, unlike TRY is a) stuffed full of debt which won't be paid down any time soon and b) has market cap of US$500 million (TRY is US$92 million). GUY is looking at ramping up to about double the production of TRY near term, but the valuation divergence looks pretty amazing since GUY is basically an exploration play just moving into production and has stacks of debt, while TRY has had long production experience in South American with its other mines.

Guess my other point is that North American investors are comfortable with the country risk with GUY and are actually seeing Guyana as an opportunity as it is basically under-surveyed and coming up with some stellar drilling results. I hope some of this attitude will rub off on TRY before too long.

Justin

[cyberbub] 22/2/2016 21:50

Thanks Justin.

I bought a few TRY yesterday only to see them fall immediately... sigh... I think the RSI was a bit too overbought... still seems highly undervalued though IMO...

NAI

[cyberbub] 22/2/2016 21:49

Chip, thanks for your post 35874.

Are you deducting tax from that? I recall that you aren't, so your quoted EPS of say 30c would end up being 20c? Of course they have some tax losses to offset.

I don't quite understand in your post 35874 how you are saying that H2 EPS would only drop from 15.6c to 14c, if the gold price dropped from $1100 to $1050. Surely with AISC at $950 the leverage effect would reduce EPS proportionately more?

I suppose that by next year the AISC should be dropping down towards $800 once the new shaft is completed, so any drop of $50 in the average sale price should be more than offset by a drop in AISC by $100 say.

The nightmare scenario is of course if gold were to drop back below $1050 and back into the long-term downtrend. Personally I think it's unlikely but of course I don't have a crystal ball...

GLA

[justinjjbuk] 22/2/2016 21:36

cyber

The Australian Stock Exchange (ASX)carries all the company releases. So, for example, MML is here:



Better still, under the ASX education tab you can find MyASX. You can register for free and then you can set up a watch list (15 if you want). Each watch list allows 20 stocks, so you can have one for large cap, mid cap and junior exploration and so on if you want.

Better still, next to the ticker for each name on your watch list is an indicator if there has been a recent release. So, for example, today I see that NST has a release (a road show presentation), SAR (positive drilling results), and BDR (notice of General Meeting). You can then click on the release symbol and jump straight to the individual stock page with the release; click on that and you will get the pdf.

It's a nice way to prepare for the ASX market open at 11pm UK time as you can see what may move a stock price and how each stock moves to such news. Gives you a feel for the temperature of the market. Sometimes markets jump on good news, sometimes they counterintuitively sell-off as the market has already discounted the news or people use a jump in liquidity to profit take.

You can also go onto Medusa's web site and click on the subscribe button on the bottom right-hand corner. The releases will then be delivered straight to your e-mail inbox. On occasion I've noticed that there has been a gap between the Medusa e-mail release and the posting of the release on the ASX site. If this were to happen during market hours, it could actually provide a trading opportunity.



Hope this helps.

Justin

[cyberbub] 22/2/2016 20:49

No sign of the H1 figures yet?

[atlantic57] 22/2/2016 17:02

Thanks jimbo I need to take a look.

[jimbo55] 22/2/2016 13:54

Me too to be honest Atlantic. I think Chip's fundamental analysis of mining stocks is likely to be some of the best you'll find. However, after enduring the Gold Bear since 2011 with you and other people on these boards, I've come to respect charting as a risk management tool. For instance, take a look at the EMAs on the following charts:





In the first chart, you'd have been unlikely to have dodged the first leg down of the 2013 Waterfall decline, but you'd still have dodged the worse of the last two years. In the second chart (MML), you'd have been able to avoid the worse of the decline from the $4.50 mark.

It's true that moving averages are a lagging indicator, but the death crosses on those charts would have got anybody out of the worst of the Gold Bear market for anybody who'd acted on them as sell signals. They're also invaluable when it comes to avoiding value traps. I would agree with anybody who says charting is an art rather than a science, but it provides some handy sell signals and warnings about when to be careful. Right now, I'm cautious because the Gold chart is both overbought and showing that some of the froth is starting to come out. I think the latter is a very positive development for the medium term price of Gold, but I have no clue where the correction will bottom out at or exactly how hard it will hit the miners. I think there will be plenty of people in the wings looking to climb aboard, so I doubt we'll see more than a 20% retracement in the mining stocks. However, I could be wrong so will watch and wait for it.

[atlantic57] 22/2/2016 11:10

Jumbo I think you have to find a system that works for you in terms of reading the tea leaves.
I am not good at many things and certainly technical resistance is not my bag.
My own guide for is the share price I certainly cannot predict the future.
I am impressed by chips methodology.

[atlantic57] 22/2/2016 09:40

Gold recent storm ahead now running out of steam
Hopefully a breather before the next leg up

[deka1] 22/2/2016 03:28

cyber hi, medusa has never had a large amount of debt to banks,the new process plant was funded from cash flow, and afaik a lot of hedging is put in place as a condition of loans, perhaps that is why MML have never had any hedging of price,thats not to say they could not have it future.

[noirua] 22/2/2016 00:09

cyberbub, not quite what you ask for but close.
Try
- live prices free



Market depth has to be paid for though a few Aussie Brokers provide it free with trading packages.

[cyberbub] 21/2/2016 20:41

I am a bit of a newbie on holding Aus stocks. Can anyone advise how to get the news announcements on them automatically into my Inbox? Advfn don't carry them.

[cyberbub] 21/2/2016 19:40

Have Medusa never considered doing some judicious hedging? Just thinking that hedging 50% at say $1175 for a year could reduce some of the short term risk. I am coming round to the view that TRY have been sensible to do so.

[justinjjbuk] 21/2/2016 17:25

Chip

Thanks Chip. Very interested in your views on TRY and RSG here.

I feel that 19 January could mark the cyclical low for the gold miners. My aim is to run 5 to 7 names in my PM portfolio to remove any specific mine risk. Much as I like MML, it is operating just one underground mine; I would guess that Bananghilig is 5 years away at best from production start even if the gold price behaves itself.

Thankfully, there still appear to be a lot of small cap PMs around (with market caps around %100 million) that traded over $1 billion 4 years ago and could get back there again. It's just a question of maximising the quality of the portfolio.

Justin

[cyberbub] 21/2/2016 17:19

Thanks for the Kitco link, Chip. I can only see 3 Aussie listed gold small caps, which range from 8 to 16 forward P/E. I am not sure whether these 3 are overseas projects or not - will look into it.

[chipperfrd] 21/2/2016 16:28

Justin,

Rather than add to the off-topic posts on this thread I have posted a bit of a summary of SLR on another thread of mine which is a fairly general 'talking shop' on gold stocks.

(post 6229)

I don't have any previous on TRY or RSG but will try and find a bit of time to have a look in the week ahead.
Chip

[chipperfrd] 21/2/2016 14:05

cyber,

One handy reference is here:


Scroll down to the gold Large Caps/Mid Caps/Small Caps and you can read the current (2015) P/Es and forward (2016) estimated P/Es for a reasonable range of stocks.

Average for Large Caps = 39.2
Average for Mid Caps = 34.1
Average for Small Caps = 19.1

Chip

[cyberbub] 21/2/2016 13:01

Back onto MML, does anyone have an inkling of a realistic P/E that we might achieve in due course?

Given that it is an overseas project, I suppose that investors might give it a p/E of probably not more than 10 say?

Luckily (assuming gold stays around current levels) that is still a 5-bagger from here :-)

Is there a peer group comparison to try and draw any conclusions?

I have looked on Hot copper.com and some posters there are saying that overseas gold producers are often only given a p/E of 3 or 4, but that seems excessively pessimistic to me?