Medusa Share Discussion Threads

[rrr] 27/4/2016 09:46

Shanghai Gold Benchmark Price Launching Ceremony Press Release (20/04/16)

[chipperfrd] 27/4/2016 03:21

Hi cncventure,

The CAR alone does not factor in the market valuation currently being ascribed to a stock - so you are quite right, it needs to be used with other metrics as well.

It also does not take into account how much debt or share dilution has taken place, both of which may have negative implications from an investment standpoint.

I currently also use a modified version of the CAR which includes net debt and net assets to get a fuller financial picture. I then combine it with Ev per attributable Reserves and M.I. Resources to get a valuation measure which can be compared with current market pricing.

This can then be doubly checked against the myriad of other ratios and also the future prospects/exploration/M&A/management/etc which help form a more common-sense impression as to the invest-ability of a stock.

It all comes down to due diligence and opinion in the end - but it is a fascinating and rewarding 'game' when it all works out!

Good fortune to you.
Chip

[cncventure] 27/4/2016 01:58

Great post Chip. Really interesting to see how all the different gold miners stack up against one-another!

That said, I assume that given that the CAR metric is based on revenues it better reflects a gold miner's "operation" quality, rather than its "investment" quality, correct?

And that a potential way to get a good indication of if a gold miner not only has a good operation, but also good prospects as an "investment" you might divide the CAR ratio by something like a "Price to Sales ratio" (or as I prefer the Enterprise Value to Sales ratio) and then rank accordingly?

Ie MML and NCM's Cash Adequacy Ratios are 1.21 and 1.29 respectively, but their currently EV to Sales ratio based on their half yearly reports (according to my figures) are 0.58 and 4.37 respectively:

So based on your CAR figures alone, NCM looks like a better investment, but once factoring for the share price you pay to buy part of the MML or NCM operations I get the following:

1.21 / 0.58 = 2.086
1.29 / 4.37 = 0.295

Would this not make MML a SUBSTANTIALLY better "investment" than NCM?

Also one other question, are you certain EVN's 2016 CAR is 0.50? I haven't looked at the figures but that seems low?

[chipperfrd] 27/4/2016 01:12

I should comment re the above table that SHG and GBGR are yet to publish their 2H15 financial results. Both of which should be better than their 1H results. Hence, my expectation is that their final CAR for FY15 should be somewhat higher than depicted in the table.
Chip

[chipperfrd] 26/4/2016 19:51

Here is my table (by FY) for Cash Adequacy Ratio (CAR) - ordered by highest average per stock (RH column). Not an end in itself because there are lots of other factors than one has to take into account when stock-picking, but it does at least focus on cash flows, so it's not a bad place to start!

Ideally, CAR should be greater than 1.

STOCK . 2010 2011 2012 2013 2014 2015 2016 Average
SSRI .. .... 3.89 1.44 0.89 0.55 1.07 .... 1.57
TAHO .. .... .... .... .... 1.62 1.32 .... 1.47
SBM ... .... .... 1.82 0.75 1.00 1.33 1.56 1.29
RSG ... .... .... .... .... 1.10 1.32 1.45 1.29
CMCL .. .... .... 1.82 1.19 1.18 0.86 .... 1.26
AAZ ... 1.95 2.07 0.89 0.81 0.86 0.97 .... 1.26
BDR ... .... .... .... 1.44 1.38 0.94 .... 1.25
GORO .. .... 1.53 1.32 1.11 1.21 0.95 .... 1.22
ABX ... .... .... 1.04 1.01 1.20 1.52 .... 1.19
KCN ... 1.61 1.31 1.67 0.82 1.00 1.05 0.76 1.17
FRES .. .... .... 1.54 0.96 0.98 1.16 .... 1.16
CDE ... .... 1.58 1.38 1.00 0.98 0.84 .... 1.16
EGO ... .... 1.56 1.28 0.96 1.05 0.90 .... 1.15
AU .... .... .... 1.00 0.92 1.16 1.51 .... 1.15
NEM ... .... 1.05 1.14 1.09 1.30 1.12 .... 1.14
PRU ... .... .... 0.83 1.25 1.15 1.36 1.01 1.12
PAAS .. .... .... 1.51 1.05 0.89 1.00 .... 1.11
POLY .. .... .... .... 1.17 1.13 1.01 .... 1.11
KGC ... .... .... 0.95 1.13 1.21 1.12 .... 1.10
NCM ... .... .... .... 0.72 1.12 1.26 1.29 1.10
HL .... .... 1.75 1.10 0.50 1.03 1.00 .... 1.08
MML ... 1.35 1.38 0.71 0.94 0.78 1.13 1.21 1.07
EXK ... .... .... .... 1.05 1.09 1.07 .... 1.07
RRS ... .... .... 1.07 0.82 1.25 1.14 .... 1.07
GV .... .... .... 0.95 1.04 1.18 1.12 .... 1.07
GPL ... .... .... 1.01 1.25 0.92 1.10 .... 1.07
PAF ... .... 1.09 1.38 0.68 1.08 0.99 1.16 1.06
CEY ... .... .... 0.98 0.95 1.20 1.12 .... 1.06
OGC ... .... .... 0.70 1.16 1.26 1.10 .... 1.06
MND ... .... .... 1.29 1.10 0.85 0.99 .... 1.06
SVM ... .... .... 0.94 0.99 1.05 1.23 .... 1.05
AEM ... 1.04 0.98 1.23 0.88 0.90 1.24 .... 1.04
EDV ... .... .... 0.95 0.89 1.06 1.22 .... 1.03
RRL ... .... .... 0.84 1.27 0.72 1.18 1.13 1.03
ACA ... .... 1.20 0.89 0.88 1.05 1.03 .... 1.01
FSM ... .... .... 1.31 0.82 1.00 0.90 .... 1.01
TSG ... .... 0.34 0.91 0.78 1.37 1.62 .... 1.00
EXN ... .... .... .... 1.08 1.03 0.89 .... 1.00
NST ... .... .... .... 0.98 0.80 1.07 1.14 1.00
OMI ... .... .... .... 0.93 1.13 0.95 0.93 0.99
RGLD .. .... .... 0.79 0.71 1.23 1.20 .... 0.98
HGM ... .... .... 0.92 0.55 1.06 1.34 .... 0.97
HMY ... .... .... 1.11 0.88 0.91 0.78 1.04 0.94
FNV ... .... 1.15 0.52 2.22 0.44 0.35 .... 0.94
KGI ... .... .... 0.67 0.80 1.08 1.16 .... 0.93
AG .... .... .... 0.89 0.76 0.85 1.17 .... 0.92
GG .... .... .... 0.94 0.73 0.75 1.21 .... 0.91
SLR ... .... .... .... 0.59 0.92 0.98 1.10 0.90
HOC ... .... .... 0.94 1.00 0.79 0.85 .... 0.89
EVN ... .... 0.95 0.97 0.71 1.03 1.09 0.50 0.88
KDX ... .... .... .... .... 0.62 1.11 .... 0.87
AUY ... .... .... 0.86 0.80 0.74 1.01 .... 0.85
USA ... .... .... 1.02 0.84 0.76 0.79 .... 0.85
POG ... .... .... .... 0.66 0.93 0.95 .... 0.85
AVM ... .... .... 0.87 0.77 0.84 0.84 .... 0.83
PGD ... .... .... .... 0.41 1.13 0.91 .... 0.82
ASM ... .... .... 0.75 0.98 0.68 0.84 .... 0.81
SHG ... .... .... .... 0.72 1.06 0.63 .... 0.81
TRY ... .... .... .... .... 0.88 0.71 0.71 0.77
GBGR .. .... .... .... 0.82 0.62 0.86 .... 0.76
SRB ... .... .... .... .... 0.52 0.99 .... 0.76
SLW ... .... .... 0.93 0.30 1.49 0.28 .... 0.75
AXU ... .... .... 0.78 0.79 0.65 0.77 .... 0.75
SAND .. .... .... 0.57 0.61 0.60 0.22 .... 0.50

Avge .. 1.49 1.46 1.05 0.91 0.99 1.03 1.07

Cash Adequacy Ratio (CAR) = Revenue/(OP Costs + G&A + Investment CF + Finance Costs + Dividends)

Chip

[chipperfrd] 26/4/2016 16:58

Hi Tightfist.

It has occurred to me that building a table (by year) for the CAR results from all the other producers in my accounts workbook might provide a useful comparison.

I have only a few years for many of them so it might be a bit limited - but I will look into it.
Chip

[tightfist] 26/4/2016 14:05

Hi Chip,

Thanks the historic CAR data, very useful and extremely straightforward. Q2 gold price received was $1,096 so hopefully we can look forward to~8% price uplift, before we consider possibly lumpy Service Shaft Capex (the ventilation project must be finished?) and production maybe falling slightly from Q2 due to underground L8 congestion?

We will soon see - whatever, I am very confident over the medium term.

Cheers, tightfist

[ilostthelot] 26/4/2016 13:06

Thanks Chip.time to reap the rewards over the next few years me thinks

[chipperfrd] 26/4/2016 12:41

Their quarterly figures have been pretty consistent since the old management departed, so I think it reasonable that the March quarter will follow the trend.

The average realised gold price is likely to have been c. US$1,190/oz which is back to the same level as the June quarter of 2015.

If one uses the simple metric "Cash Adequacy Ratio" (ie Revenue/(OP costs + all other outflows, Expl, Dev, Capital, Corporate) then that worked out at a healthy 1.26 for June 2015 - so there would appear to be a very good chance of a similar positive outcome for this past quarter as well.

CAR for previous quarters was as follows:
Sep 14 ~ 1.1
Dec 14 ~ 1.28
Mar 15 ~ 0.81 (this was the quarter when they only sold 17.1koz!
Jun 15 ~ 1.26
Sep 15 ~ 1.18
Dec 15 ~ 1.15

Obviously, each positive CAR effectively adds cash to the balance sheet.
Chip

ps. Their average CAR over the last 22 quarters is 1.10. Pretty good when you consider that this included c. US$70m of capital works for the mine and mill expansion.

[tightfist] 26/4/2016 11:21

Most of the Quarterlies have been 2-3 days before following month-end. I think one was recently on the last day. Here's hoping!

I don't think the share price is going anywhere until we have seen the numbers, FY guidance and Boyd Timler's approach!

tightfist

[chipperfrd] 26/4/2016 10:32

My guess is Friday.

[polaris] 26/4/2016 09:40

Are MML still giving Qly production stats and isn't the report due this week if so? In fact, it should be tonight for the ASX looking at previous reporting dates.

thanks,

Paul

[noirua] 26/4/2016 09:23

BUY RECOMMENDATIONS
Medusa Mining (MML)

[chipperfrd] 25/4/2016 16:54

More on Comex from Bill Holter:

[roguetreader] 24/4/2016 12:48

Gold article below from Jim Rickards, although not wholly new it is interesting in itself, but more so as it is in the main stream press 'the Telegraph'.



RT

[chipperfrd] 23/4/2016 20:41

Thanks BL :-)

[bluelynx] 23/4/2016 17:29

Latest Andrew Maguire interview on King World News

[abacus23] 22/4/2016 19:56

Well gold has been smashed today.

Hopefully the results will slow the inevitable drop. :(

[chipperfrd] 22/4/2016 08:22

Yes, 16,000 gold contracts were dumped and 7,500 silver contracts in a matter of minutes. That is 1.6moz of digital gold and 37.5moz of digital silver.

Roughly equivalent to US$2.032b of gold and US$0.66b of silver.

So the price has held up really well considering!

[edjge2] 21/4/2016 21:10

No spike yet here but probably coming. ASX PRU probably good too.

[ilostthelot] 21/4/2016 16:26

Cheers tightfist.

I note the price has hit 90c the other day intra day that suggests,to me, it won't be long before it goes higher.

[abacus23] 21/4/2016 12:02

Gold's looking like its breaking out as we speak.

Interesting times.

[tightfist] 21/4/2016 11:41

ILTL,

We are expecting the Q3 production figures next week. There will surely have to be reference to the Operational Review by then to confirm (or not) the FY guidance, at the very least.

It's interesting to watch trading and see if we can close above the 85c level. Will PoG take us there or do we need the Q3 numbers first?

Cheers, tightfist