Medusa Share Discussion Threads

[ilostthelot] 04/4/2016 08:07

The share price is tracking gold for the time being when is the next update expected?

[roguetreader] 03/4/2016 14:30

Nielsc
re your query on Realvisontv. I took up the Free Trial offer to see what it was like, as I like listening to and reading quite a few of the people that Grant Williams quoted as being one's who they had interviewed to date. So far I've listened to interviews / discussions with the likes of James Grant, Fred Hickey, Nouriel Roubini, Albert Edwards plus a number of others of whom I'd not previously heard of e.g. Brent Cook, John Llewelyn, Dan Tapiero etc. In total I've probably listened to about 10+ interviews and so far I've only switched off from one of them, so I'll be looking to subscribe after the Free period is up.

So far I've only scratched the surface as there are in the region of 150 videos stretching back to 2014. Given Raoul Pal and Grant Williams are macro oriented there is a lot of interviews with individuals in this field but with varying perspectives on the big picture which makes it interesting (assuming you have an interest in that area in the first place). It is not a font of information on individual companies per se and therefore not a place to look for share tips although both Fred Hickey and Brent Cook stated what their investment interests were. Also although macro oriented to a degree it does have a wide a varied set of interviewees where the some of the ones I had not previously heard of where most thought provoking. I'd recommend taking up the Free Trial if still available you can always cancel after a week if you don't think it worthwhile.

RT

[polaris] 31/3/2016 11:53

I still have orders at 0.685 and 0.675 that i will leave in place for now. The price has been quite erratic of late as has the pog. If we did get the backtest of the 1150-1180 region in pog then we might yet see mid 0.60s.

regards,

Paul

[ilostthelot] 31/3/2016 11:40

I was kicking myself this morning.i put a limit in for 70c and didn't get filled. Wish I'd just stay up and bought at Market price now after the strong move up.
I'll prob end up paying 80c now and the price will drop knowing my luck. Good value regardless so I shouldn't complain.

[tightfist] 31/3/2016 09:32

Thanks Chip, that's a helpful backdrop. Unfortunately the Peso has run counter to the 3-year trend and strengthened by about 4% during Q3 which will take some of the shine off the AISC? So we now patiently await the Q3 production figures and confirmation of FY guidance.

The chart suggests 70c is becoming a support level at this PoG.

Cheers, tightfist

[chipperfrd] 31/3/2016 08:53

At the end of the third quarter for MML.

Average gold price (as of last Friday) was $,1188/oz.

Average market price over the December quarter was $1,101/oz although MML reported that their average realised price was $1,096/oz.

Increase in gold price for 3Q16 would therefore appear to be c. 8%.
Chip

[deka1] 29/3/2016 13:33

Hi Chip, my thoughts exactly lol

[chipperfrd] 29/3/2016 08:26

Thanks deka, but I am surprised that anyone thought differently!

It has all been obvious for decades.

[chipperfrd] 29/3/2016 02:21

Justin,

I quite agree, the table that I compiled is only one facet of what must be a mult-faceted approach to investing in this sector. If anything, that table is probably more useful in just high-lighting those stocks which are currently over-valued, although it does clearly emphasize a few stocks which are very under-valued on financials alone.

My principal approach has always been through building bottom-up earnings models, mine scheduling, thorough costings, pre and post start-up capex requirements, and measurable NPR/IRR figures across a range of product pricing scenarios. By working through large numbers of projects and then submitting them to critical direct comparison was, in my view, an excellent way of improving my probability of success.

That approach worked in the majority of cases from 2001 to late 2012, but became clearly redundant in 2013 as cash rapidly withdrew from the sector and both early-stage and late-stage projects looked destined to struggle or fail. Hence, my switch to a strong reliance on existing producers and the merging of operating data and financial data to try and identify the strongest survivors through an extremely tough time for the industry.

I have been starting to re-awaken my earnings models and have already built a few new ones, but I am continuing to run my balance sheet workbook in parallel, as both methods have merit in my view.

These recent years have also prompted me to take a very different approach to my holdings. I am far less inclined to build a conventional LTB&H position. I now constantly trade the market zig/zags to reduce holdings costs and aim to recycle cash as many times as possible to gain maximum free-carried shares across a larger range of stocks.

In some respects, the bear market in PMs, tough as it has been, has also proved to be a useful learning experience. I have every confidence that better times for the sector are ahead so it may now be a case of adapting my new tools for a very different type of market.
Chip

[justinjjbuk] 29/3/2016 01:29

Oh, and I like MLX: already profitable, no debt, new gold mines coming on stream consecutively over next few years, a management team with a proven track record of making acquisitions that have added value and very cheap.

Justin

[atlantic57] 28/3/2016 11:48

August people can use whatever language they like !
These may range from liars to gross incompetence at one extreme.
However the market will always make the final judgement and the one that counts.

When the tide goes out you see who is wearing swimming trunks.

[deka1] 28/3/2016 06:24

Cheers chip,

[augustusgloop] 28/3/2016 01:31

BlueLynx 6 Mar'16 - 10:42 - 35996 of 36128 0 0


Our friend augustusgloop on another gold company thread stated that he believe that the Directors of MML have been proven to be complete liars and anyone investing in them must be complete mugs.

This I feel is totally harsh on the BoD, at worst I would say the Director's were gulity of being overly optimistic and given the very high gold price in 2011 who could blame them.

-----------

BlueLynx

Look back at the RNS from MML

They initially said that the mine work and new mill would cost $70m and take two years.

In this time, they forecast 115,000 oz in the first year and 110,000 ounces in the second year --- then running at 200,000 per year after that.


From memory - they achieved about 65,000 oz p.a. in the first 3 years
They are still nowhere near complete on the mine work.
They have probably spent well in excess of $300m and are still going.

------

Their failure to hit production targets - by a massive amount
And the huge overspend - has nothing to do with the falling POG.


I think that you are being very generous by now claiming that an overspend of about $250m and missed production (cumulatively) of about 350,000 ounces in just over 4 years --- is just them being a bit overly optimistic.

[bluelynx] 27/3/2016 14:06

Chip

It's quite incredible how investing, especially in gold / silver miners, can throw a curve ball and totally confuse us. Even you with all the detailed research you carry out.

I guess the price move in SBM was telling us that insider's were buying heavily, something that appears to be absent with MML at the moment.

I hope MML can continue to improve their production and cost numbers like SBM have done.

BL

[tightfist] 27/3/2016 13:54

Hi Chip,

Thanks too from me for sharing your painstaking work - and your sincerity regarding SBM - I guess we have all discarded ideas, only to take note a few months later and see that some Frogs actually do turn into Princes!

I particularly noted RSG (Resolute) in some of Justin's figures last week and I am going to take a closer look in the name of diversification.

O/T: I would echo your comments on SHG (Shanta) where management decided to incur a lot of cost quickly to make the future better, and those results (and the chart) are starting to come through, comparing H1 and H2. They are now working their way through the Capex requirements. Recent CEO hire Tony Bradbury comes over well; results expected in three weeks?.


Cheers, tightfist

[chipperfrd] 27/3/2016 12:55

Hi BL,

SBM is an excellent case in point! A comparison table is a snapshot of a specific reporting period, and when I completed updating my workbook for FY2014, SBM looked absolutely terrible.

I already knew about Simberi and The Solomon Islands from my prior experience with Allied Gold, so I was extremely negative regarding their financials over 2015. Consequently SBM was one of the stocks that I did not bother updating when all the financials to 30th June became available. It is only now, in retrospect, when I have updated for their FY to 30th June and their 6m to December 31st, that I clearly see the turnaround.

All their metrics had dramatically improved in their June report and as I compute the potential share gain from growth in EPS and Production, I can now see that it was indicating a probable 7-fold uplift. But I missed it because I did not want to do all that tedious work at the time (doh!!!)

Another example from my above table is SHG. The results look pretty awful for the 6m to June 30th yet I am fully aware that they were undertaking an expensive pit push-back over that period and they had advised as such. The 2H15 operating figures were far improved and their financials (when reported) will, I am sure, be a far better set of numbers.

But all the figures in the current table are sucked out of my workbook, warts and all, and more work is always required to try and peer into the future.
Chip

[bluelynx] 27/3/2016 12:04

Chip

Once again thanks for sharing your research, the above table must represent many hours of detailed work, which is tremendously generous of you to share.

You can see from the table why SBM has gone up near 2000%, let's hope MML can match it.

BL

[chipperfrd] 27/3/2016 02:39

Comparison table for a range of PM stocks (silver producers have the double-digit AICs). Most are based on financial & operating reports up to 31/12/15, although there are still a few up to 30/6/15 which I will get round to. I have another 28 still to complete for the whole FY15.

The focus of the table metrics is over/under valuation. No one singe metric does the job so I have included a range which (I hope) will help to form an opinion.

.... Reporting ...... ....... ....... ..... ...... ...... ........ Sales . Sus Grth
Stock . Period ... P/E . Margin . EBT/Ev ... AR ... AIC . Magic . Growth ..... Rate . PBV
SBM ....... 6m ... 6.5 .... 25% .... 17% . 1.56 ... 666 ... 36% .... 14% ...... 55% . 5.0
RSG ....... 6m ... 1.8 .... 38% .... 28% . 1.45 ... 796 ... 48% ..... 8% ...... 58% . 1.5
TAHO ..... 12m .. 29.7 .... 16% ..... 7% . 1.32 .... 10 ... 15% .... 48% ..... -14% . 1.1
NCM ....... 6m .. 58.0 ..... 5% ..... 2% . 1.29 ... 802 .... 3% ... -29% ....... 2% . 1.4
AEM ....... 6m . 101.1 ..... 4% ..... 2% . 1.27 ... 889 .... 3% ..... 5% ....... 0% . 1.9
HGM ....... 6m .. 10.5 .... 11% ..... 6% . 1.26 ... 764 .... 7% ... -14% ....... 1% . 0.4
SVM ....... 9m .. 21.0 ..... 9% .... 12% . 1.23 .... 10 ... 16% .... -8% ....... 2% . 0.8
EDV ....... 6m ... 8.2 .... 13% .... 11% . 1.22 ... 922 ... 17% ..... 5% ....... 9% . 1.3
MML ....... 6m ... 1.9 .... 45% .... 28% . 1.21 ... 928 ... 41% .... 13% ...... 16% . 0.5
RGLD ...... 6m .. 40.2 .... 31% ..... 3% . 1.20 ... 647 .... 4% .... 10% ...... -1% . 1.4
AG ....... 12m ... 0.0 ..... 0% .... -4% . 1.17 .... 11 ... -7% ... -11% ..... -21% . 0.8
FRES ..... 12m . 136.0 ..... 5% ..... 3% . 1.16 .... 11 .... 8% ..... 2% ....... 1% . 3.1
NST ....... 6m .. 10.1 .... 15% .... 16% . 1.14 ... 936 ... 34% ..... 1% ...... 15% . 3.5
RRL ....... 6m .. 12.8 .... 19% .... 12% . 1.13 ... 893 ... 25% ..... 5% ...... 13% . 2.7
CEY ...... 12m .. 27.2 .... 10% ..... 7% . 1.12 ... 961 ... 11% ..... 8% ....... 1% . 0.8
OGC ...... 12m .. 30.6 .... 10% ..... 6% . 1.10 ... 863 ... 10% ... -10% ....... 6% . 0.7
GPL ...... 12m . -28.6 .... -9% .... -8% . 1.10 .... 12 .. -19% .... 35% ..... -16% . 1.9
SLR ....... 6m . 387.6 ..... 0% ..... 0% . 1.10 . 1,042 .... 0% .... 13% ....... 0% . 0.8
EXK ...... 12m . -15.7 .... -9% .... -5% . 1.07 .... 15 .. -17% .... -7% ..... -77% . 2.9
SSRI ..... 12m .. -5.8 ... -20% ... -15% . 1.07 .... 14 .. -24% .... 25% ..... -16% . 1.0
AUY ....... 6m .. -8.7 ... -17% .... -3% . 1.06 ... 993 ... -3% ..... 0% ...... -3% . 0.4
ACA ....... 6m .. 52.8 ..... 3% ..... 4% . 1.03 . 1,121 .... 6% .... -4% ....... 0% . 0.8
PRU ....... 6m ... 8.5 ..... 8% .... 25% . 1.01 . 1,429 ... 27% ... -11% ....... 2% . 0.3
HL ....... 12m . -11.6 ... -20% .... -3% . 1.00 .... 12 ... -4% ... -11% ...... -7% . 0.5
PAAS ..... 12m . -19.9 ... -12% .... -9% . 1.00 .... 13 .. -15% ... -10% ..... -17% . 0.8
CMCL ...... 6m .. 12.9 ..... 6% .... 41% . 0.97 . 1,081 ... 47% ..... 5% ....... 1% . 0.8
AAZ ....... 6m .. -1.5 .... -8% ... -14% . 0.97 . 1,206 .. -17% .... 23% ...... -4% . 0.1
OMI ....... 9m .. -1.6 .... -9% ... -89% . 0.94 . 1,326 .. -94% ... -16% ...... -6% . 0.1
BDR ...... 12m .. -7.5 ... -14% ... -12% . 0.94 . 1,241 .. -33% ... -27% ..... -24% . 1.7
HMY ....... 6m .. -8.0 ... -14% ... -23% . 0.92 . 1,332 .. -27% .... -2% ....... 2% . 0.3
FSM ...... 12m .. 33.9 ..... 9% ..... 8% . 0.90 .... 15 ... 15% ... -11% ...... -4% . 1.1
EXN ....... 9m .. -4.6 ... -25% ... -40% . 0.89 .... 15 .. -56% ... -41% ...... -9% . 0.6
GDP ....... 6m .. -7.9 .... -6% ... -10% . 0.88 . 1,352 .. -12% ... -29% ...... -7% . 0.4
GBGR ...... 6m . -66.5 .... -3% .... -1% . 0.86 . 1,410 ... -2% ... -27% ...... -1% . 0.7
HOC ...... 12m .. -8.4 ... -14% .... -7% . 0.85 .... 20 .. -10% .... -5% ..... -26% . 0.4
CDE ...... 12m . -12.7 .... -8% ... -13% . 0.84 .... 20 .. -19% ..... 2% ..... -72% . 0.8
ASM ...... 12m .. 97.1 ..... 3% ..... 5% . 0.84 .... 15 .... 9% .... -1% ....... 1% . 0.8
PAF ....... 6m .. 22.7 ..... 8% ..... 7% . 0.83 . 1,057 ... 10% ... -12% ...... -6% . 1.4
USA ....... 9m .. -3.9 ... -29% ... -45% . 0.79 .... 14 .. -59% .... 78% ..... -14% . 0.4
KCN ....... 6m .. -9.6 .... -5% ... -23% . 0.76 ... 922 .. -28% ... -41% ....... 0% . 0.3
TRY ....... 6m . -12.0 ... -10% .... -6% . 0.71 . 1,759 ... -9% ... -27% ...... -4% . 0.9
SHG ....... 6m .. -2.6 ... -26% ... -22% . 0.63 . 1,854 .. -28% ... -44% ...... -9% . 0.5
EVN ....... 6m .. 15.0 .... 12% ..... 6% . 0.50 . 2,368 .... 9% .... 82% ...... -3% . 1.4
SLW ...... 12m .. 31.2 .... 34% ..... 3% . 0.28 .... 53 .... 7% ..... 5% ...... -7% . 1.2


Notes:
P/E: Price to Earnings Ratio based on share price at close on 24th March and prior earnings
Margin: Net Profit Margin after Tax as a % of Sales
EBT/Ev: Earnings Before Tax as a % of Ev (Ev is Enterprise Value, ie MktCap - cash + debt)
AR: Adequacy Ratio (should be better than 1.00)
AIC: All In Costs (like AISC but with all capital expenses included)
Magic: Formula devised by Joel Greenblatt to identify under-valued equities (highest is best value)
Sales Growth: Year on Year % change
Sus Grth Rate: Measure of likely forward growth
PBV: Price to Book Value (Current valuation as a ratio to Net Asset Value)

Any queries, please ask.
Chip

[tightfist] 26/3/2016 10:48

ILTL,

I don't anticipate that driving deeper will stop us reaching and maintaining ~$800 AISC in due course; but the new L12/16 shaft will be a hit [$80?] in a few years time.

It's hard to imagine that they would start talking about sinking all our accumulated cash into a new mine. The gallop for the exit would surely be deafening!

I will be interested to see cnc's valuation; I think he's possibly one of the Hot Copper posters?


Cheers, tightfist

[ilostthelot] 25/3/2016 11:09

Cnc what do value MML at ?

[ilostthelot] 25/3/2016 11:06

Its probably wrong to double the half year Npat in the 6 monthly report but that's how I came up with that figure.

Rough and ready like i say. Even if you half this numbers again it's still clear the valuation is to low.

For me medusa will always be developing the mine deeper so the AISC will remain closet $900 most of the time with periods of lower costs when there is less development work and more focus on production.

From investing in MML when they built a big cash pile a few years ago , I've learned that , when and if they get alot if cash again, they start talking about spending it all on building a new mine that's the time to reduce and consider taking profits.Just my opinion .

[tightfist] 25/3/2016 08:31

Hi cnc,

If it helps, I note that the Yahoo! concensus (3 analysts) for this year has risen from 24USc to 28USc (37Ac) over the past 30 days, presumably off the back of the H1 results. In post 36010 Chip was at above 40Ac, so it's all pointing to similar numbers.

The Yahoo! figure for 2017 is now flat, but with the delay to Service Shaft completion and the emphasis on developing (but not producing) on Levels 9 - 10, maybe that is something we need to come to terms with, not withstanding PoG opportunity. The Yahoo! forecast growth over the next 5 years is 5%pa which seems timid; I am looking for all of that in 2018 alone!

Cheers, tightfist