Medusa Share Discussion Threads

[speedsgh] 05/5/2017 09:44

New announcement. 'Leopards' and 'spots' spring to mind. Thankfully no longer a holder after recently crystallising the most painful of losses.

Revised Production Guidance for FY16-17 -

Medusa Mining Limited (“Medusa” or the “Company”), through its Philippines affiliates; Philsaga Mining Corporation and Mindanao Mineral Processing & Refining Corporation, is advising of a production guidance revision in relation to the Co-O Mine, based on updated information which Medusa has become aware of after the release of the March 2017 Quarterly Activities Report.
Medusa’s latest previous guidance for full year production for the 2017 financial year ("FY17"), as announced in January 2017, was between 85,000 to 95,000 ounces of gold and the Company is still aiming to reach the lower end of that guidance.
However, to err on the side of caution, in light of recent developments at the Co-O Mine described below, the production guidance for FY17 has been revised to between 77,000 to 80,000 ounces of gold...

[ilostthelot] 04/5/2017 13:34

Some positive news.A sign of things to come!?

[tightfist] 04/5/2017 10:12

deka,

I just spotted in today's FT Premium content listing:

"Duterte losing support among Philippine poor
FT Confidential Research survey suggests honeymoon period may be ending"


Unfortunately I cannot read this very topical article! "tightfist" doesn't subscribe.....


Cheers, tightfist

[deka1] 04/5/2017 09:57

Yes TF, certainly the bigger news, the country's mining industry must be popping the corks now.

[tightfist] 04/5/2017 08:53

deka,

For me Lopez moving on is a bigger plus than the adverse impact of $20 off PoG. I also see that there was a bounce at the market open.

We get little MML news flow between the quarters. It will be interesting to see if the likes of Ruffer, Arbiter & Paradice continue to build their holdings. They are possibly better informed and certainly playing the long game; they have mopped-up quite a lot of stock over the past 18? months.

Cheers, tightfist

[deka1] 04/5/2017 05:57

Gold getting sold off again I see, but MML rising.

[tightfist] 03/5/2017 14:18

Hi deka,

Yes, Lopez being rejected as environment minister sounds great news until one recalls the idiom "Better the evil you know....".

I won't be celebrating until we see the true colours of who comes next! Cheers, tightfist

[deka1] 03/5/2017 13:50

That's the best news i'v heard all week

[augustusgloop] 02/5/2017 16:32

For the guys on the other MML thread - you will know that a placing is imminent when they announce that they are doing a presentation.

[atlantic57] 02/5/2017 15:02

Tightfist good luck with your investment.

No doubt the geology of the mine is quite different from Vgm and Norseman Gold .
However the one similarity is that shareholders who kept believing were wiped out.
( i kept believing)



I am not currently invested i would want to see tangible evidence that they had indeed
turned the corner. As Justin says the next two quarters are crucial and as he also says cash flow does not look good in the recent quarter.

If Medusa is about to turn the corner and gold is about to take off then mml is a bargain.

[ilostthelot] 02/5/2017 07:03

Fwiw I agree with the Stevea and Justin.
It is make or break and it looks to me that the new lift shaft will be delayed at least one full quarter but more likely 2 quarters. Putting more pressure on restricted haulage in a bottle necked mine.

They are at 184M and need to get to below 500M. Thats a long way to go.

There really is next to no room for error cash wise , They do have a habit of making errors with something cropping up unexpectedly every Q.



Regards how far this can fall - it could go very low indeed. Kingsrose , VGM , NGL all spring to mind. It's not looking good guys sorry to say that.
However i still think we could see a spectacular recovery and there may well be a chance to buy at fire sale prices as medusa could , maybe should,be priced to go bust. Is under 10 c possible followed by a 20 bagger as the lift shaft is complete ,production hits a run rate of 150,000 with Aisc at 800 and they strike gold left right and centre with the increased drilling they have been doing ?

[cncventure] 02/5/2017 06:59

I tend to agree with Steve.

MML performance is continuing to underwhelm and there is enough mildly negative news within this report when coupled with their cash position to start becoming quite concerned...

That said, I think a capital raise for a short term funding problem at this share price would be absolutely sinful and I think shareholders would be very unforgiving if that was the route taken after the pain they've suffered over the last 5 years...

I believe that management will be able to secure some short term funding at a respectable rate should it be required for 3 to 6 months to complete the service shaft.

That said production wouldn't have to increase that much for cashflow to become a non-issue at these gold prices.

That said, I do expect they are going to miss the lower end of FY guidance.

But if they manage to do 25k for Q4 I think the market will be accepting (especially at the current share and gold price).

As some have alluded to hitting guidance is "possible" if EVERYTHING goes to plan, but I personally don't think that is "probable" given their track record of things going to plan.

As for the service shaft, from memory in a presentation they did a few months ago they were meant to be starting the blind sink of E15 from L8 to L10 at the START of March to be completed by July...

At the END of March they are only at L4.

So it would appear that they are between 2 - 4 months behind schedule (assuming no further problems).

So I'm thinking best case scenario is Oct completion.

So we may be waiting until the Q2 report of FY18 in January next year before we start seeing operational improvements brought on by the service shaft.

And as Steve alluded to it's disappointing to not see management just tell shareholders what we are able to deduce for ourselves anyway.

We shouldn't have to read between the lines.

And who knows how many MML shareholders aren't reading forums like these and are actually expecting the shaft to still be completed by July only to get a rude shock in the next few weeks or months when its announced that it won't be and the cost overruns are continuing...

As for where is the bottom for MML - I think that depends a lot on the gold price - assuming operations continue as usually and the price holds above $1250 then I think we are pretty close to it now.

I also wouldn't be putting too much stock in their NAV - I think they've been overvaluing Co-O for years by assuming an unrealistically low opex and a high gold price and in recent years neither the gold price nor MML have delivered on the assumed numbers.

[stevea171] 01/5/2017 22:28

Hi Tightfist & Justin,
Thanks for your views.

I hope, Tightfist, for your sake the optimistic scenario you mention for Q4 plays out. Unfortunately this company has failed on guidance just too many times to have any credence whatsoever.

What are the consequences if you're not right and they produce another quarter of around 20K oz? Well I mention some of them in my post above. How low can the share price go? 33c again you suggest. No, it can go to zero under a number of different scenarios. Justin mentions Kingrose Mining.

One I mentioned a few months ago - possible failure of one of the tailings dams due to violent storms and weather being experienced not just in the Philippines but worldwide resulting in mercury poisoning downstream and mine closure by DENR/Gina Lopez - and low and behold we have the following in Q3 report:

"Tailings Storage Facility (“TSF) #5 downstream catchment pond and polishing pond diversion channel (un-budgeted)"

So where has that come from and how much is it costing?

If Medusa needs funds in the next few months why would the local Banks lend to a miner given the pressure they are under by this new Government? Similarly a cash raising would have very little support. Medusa is running out of options. As Justin says: "the next 2 quarters are make or break for MML."

[atlantic57] 01/5/2017 21:52

Justin i invested successfully in mml in 2009 and sold out well before it hit peak price.However in that era each quarter confirmed consistent levels of production
and a rising gold price.

Steve correctly summarises the recent history and i believe you are correct in asserting the next two quarters are critical as the tipping point has now been reached.

i had hoped that gold would show signs of going north on a sustainable basis, thus lifting all boats.Unfortunately GOLD IS Currently looking weak.

Off Topic i would say to all on this board watch out for sula assay results due within
a fortnight.

[justinjjbuk] 01/5/2017 19:55

Separately from MML, the junior mining space has been almost impossible to navigate over the last six weeks.

One of my favourite names, BLK, had a terrible quarter. I think its problems are more easily resolvable than those of MML and it has a large cash cushion.

But behind any performance of individual names, we have the massive GDXJ rebalance by Van Eck. This is impacting 75% of the Australian and Canadian names I like such as RMS, RSG, EDV, SMF, TGX and TGZ. TGZ cover this issue in their conference call (webcast on their web site and page 19 of their accompanying presentation).

In addition, although I like some names such as BLK, GCY, DCM, MOY and so on which aren't directly impacted by GDXJ they are being indirectly impacted. Investing is relative valuation, so you will get a lot of switching right through to the completion of the rebalance on 17th June.

Investing in junior mining stocks is hard enough at the best of times, but this mega-ETF rebalance is making it a complete nightmare at the minute. For this reason, I am majority cash for the time-being, and happy to wait for this volatility to wash out.

Justin

[justinjjbuk] 01/5/2017 19:41

tightfist

I must admit I have to agree with Steve on this one. The first thing I always look at in any report is cash and the financials section does not look very helpful. The top line is that cash went from $12.9m at end Dec to $10.6m at end Mar. It's difficult to figure out the tax reconciliations as an outsider, but the $1.5m in warehouse inventory decrease and the $5.0m increase in creditors/payables should have reduced the cash outflow.

I particularly don't like the fact that creditors/payables increased at all, since all the big ticket items related to the new service shaft should have gone through the accounts a couple of quarters ago.

The tenement relinquishment (coal and gold) also suggests a circling of the wagons.

Then there is the service shaft. This was the holy grail. Once completed, AISC was slated to come down to $800. The report, however, suggests that we are nowhere close to a July completion as originally envisaged.

Moreover, as the mine goes deeper, we just appear to have a litany of new problems in the main shaft. I really wonder what steady state AISC is post the completion of the service shaft? Is it $800 or $1,200?

I think the next 2 quarters are make or break for MML. We have in Kingrose Mining a ASX-listed narrow vein southeast Asian play which went into administration since it couldn't get its costs under control. I hope MML isn't taking that path.

[deka1] 01/5/2017 15:10

Hi TF , I agree with your numbers, and yes they need to produce north of 30kozs in the June qtr to be in the area of the forcast.
If they do it ,and haulage reaches optimum for year 2018 and they get grades of 6 to 7 g/t, to get the aisc to under 1000/oz they will need to produce 140kozs + with gold at under 1300. imo

BTW, other gold stocks got hit as well last night.BLK for example was down 18%

[deka1] 28/4/2017 14:56

Thanks Chip.

[chipperfrd] 28/4/2017 11:52

Hi Dek,

Good morning to you.

No, I do not see them needing to make any equity raise. If they have any short-term working capital shortfall they could just use their local banker's overdraft facilities - as in the past!

This June quarter 'ought' to be far better in terms of ore haulage/milling/production, so cash costs and AISC/oz 'should' improve markedly.

However, as we are only too painfully aware, there is always the possibility of weather/political/social/managerial/workforce/geological related issues than can cause setbacks!

All the best
Chip