Medusa Share Discussion Threads

[deka1] 29/6/2020 06:48

Good luck arja, take a look at steves post on the other mml thread re the contract for the decline work, ,sound good , take care mate,

[deka1] 29/6/2020 06:28

Eh ?? 221

Steve cheers for that, sounds very good news to come .

[stevea171] 28/6/2020 23:29

More: "From what I’m told Byrnecut got the UG contracting gig pre covid, The crisis obviously slowed them down but they are in there now - with a reputation to uphold."

If this is confirmed it is excellent news. Burnecut is an Australian company with decades of experience of working on projects like Medusa's all over Australia, Africa, Saudi Arabia, Indonesia, etc.
"with a reputation to uphold"
They are very professional, get things done, don't mess about, and are reliable, honest and transparent.

[stevea171] 28/6/2020 11:28

No news from Medusa on contract letting for building the decline at Co-o.
It seems Byrnecut Offshore may be in the running or have recently been contracted. TBA.



They recently did a great job with building a huge decline for WAF's Sanbrado mine in Burkina Faso.

[arja] 26/6/2020 19:31

did a day trade deka1 but only made peanuts really ! 2 down days since but a higher gold price since aussie market closed at 7am might mean MML will get back to 70 or so on monday. But US markets tanking again today will not help . have a pleasant weekend sport and nice to have football back . I had planned to return to OZ but now that is
on hold for a while and this corona virus might be with us for years .

[deka1] 24/6/2020 16:06

And you arja--------- the chart head and shoulder r/h at 78 on the climb looking good, buy now while stocks last

[arja] 23/6/2020 20:33

chart starting to look interesting and gold price up since OZ close deka1 . Considering a trade if I can stay up with bright eyes at 1am although safer bets are
gold stocks with good fundamentals suchas SAR , EVN, RRL , NST etc . good luck sport

[stevea171] 12/6/2020 08:10

TF. The AO Index is widely based with hundreds of companies included so the weighting of MML is likely to be very low.

As you say there will be losers affected by the CV that will be coming out.

But, yes, a bit of good news not really of Medusa's own making .... !!

[tightfist] 12/6/2020 08:03

Thanks Steve, good news. (Curiously, Yahoo Finance dont list MML amongst the promoted companies).
.
Why the move? Their list of affected companies suggests rotation due to COVID impact, both good and bad. Maybe we remain afloat in a sea of sinking ships......

[stevea171] 12/6/2020 07:43

S&P Dow Jones Indices Announces June 2020 Quarterly Rebalance of the S&P/ASXIndices SYDNEY, JUNE 12, 2020: S&P Dow Jones Indices announced today the changes in the S&P/ASXindices, effective at the open of trading on June 22, 2020.

At this rebalance,the entire S&P/ASX index hierarchy is reviewed, including the All Ordinaries

Don't know how this has happened but ....
Should generate tracker buying of MML and possibly a spike up on Friday 19th/Monday 22nd.

Announcement:
All Ordinaries–Effective at the Open on June 22, 2020

Addition MML Medusa Mining Limited

[deka1] 12/6/2020 07:34

TF hi that's the question we would all like to be answered ,I hold on lol.

Good luck to all of you guys wherever you invest .

[tightfist] 11/6/2020 11:12

Another coup for the “protect Teo” brigade. (As I have said here many times over several years) IMO only when Teo goes do we have an opportunity for shareholder recognition and a true gold-mining strategy, as opposed to utilising OUR cash spinning THEIR wheels.
Why do Ruffer et al allow this situation to persist? tightfist

[stevea171] 11/6/2020 10:40

The Company advises that David McGowan has tendered his resignation as Chief Executive Officer (“CEO”) and will remain in the role until 14th August while a process to appoint a replacement is undertaken.

Did he resign on 14/5 effective 14/8?

Does this say anything about Q4 results to be announced in July?

I have taken a look at Avanco Resources that the new non-exec, Simon Mottram was associated with. It had gold discoveries in Brazil, 2.2 million oz, and was bought out in mid 2018 by OZ Minerals for A$444 million. It's likely OZ Minerals overpaid by 50-100% but guess they had their reasons.
Simon Motteram is a geologist based in Perth. It seems he should be independent and could offer good advice. Appointment immediate. It seems likely he was head hunted from 14/5 when Dave McG handed in his notice.

Dave McG was invisible all the time he was CEO (14 months). Teo engineered his promotion through the company and appointment to CEO to ensure Teo would remain unchallenged.

As others have pointed out CEO's come and go with regularity at Medusa but the problem remains which is a geriatric board of accountants with no idea how to develop a gold mining company.

PS. I sold all my UK held MML in the 80's earlier this year and promptly doubled my money from the switch. This week I sold 2 lots of my Auz held MML leaving a small residual holding for better times.

[pigeonfeeder] 11/6/2020 08:29

I bought back into MML following the recent massive increase in money printing globally and the fall in the share price.

Sold out again at 0.67c last night. Not because I knew that the CEO was going to resign but because of the following article on Seeking alpha which reinforced my own fears about the company:

[tightfist] 11/6/2020 08:14

Reminds me of the Queen song “Another one bites the dust”. Please remind me - how many choruses/CEO’s were there.....
.
Good luck! tightfist

[c9ajl] 11/6/2020 07:48

Company Updatehttps://www.medusamining.com.au/wp-content/uploads/2020/06/200611_Company-Update-1.pdf• Experienced mining executive Simon Mottram appointed as Non-Executive Director• David McGowan resigned as CEOMedusa Mining Limited ("Medusa" or the "Company") is pleased to advise that it has appointed Mr Simon Mottram as an independent Non-Executive Director.Mr Mottram is a geologist with over 25 years' experience predominantly in base and precious metals. Mr Mottram was instrumental in taking Avanco Resources, an Australian listed copper company, through discovery to production, and subsequently being acquired by OZ Minerals. Mr Mottram has held both executive and senior management roles with several successful mining companies both in Australia and abroad and has seen a number of discoveries advanced through to commercial mine development and has been central to several significant exploration successes.The Company advises that David McGowan has tendered his resignation as Chief Executive Officer ("CEO") and will remain in the role until 14th August while a process to appoint a replacement is undertaken, thereafter David will be available to consult on an as needed basis. David joined Medusa in February 2017 as General Manager - Engineering and subsequently served as the Company's Chief Operating Officer before being appointed CEO in March 2019.Chairman's comments:Commenting on Mr Mottram's appointment, the Company's Chairman, Mr Andrew Teo said: "We are delighted to announce Simon's appointment. Simon is a well-respected mining executive with an excellent track record, whose experience and skill is complementary to the existing team. In particular his experience in frontier jurisdictions would prove invaluable. We look forward to his contributions."Commenting on Mr McGowan's resignation, Mr Teo said: "On behalf of Medusa's Board, employees and shareholders, I would like to thank David for the invaluable contribution he has made to the Company. David has fostered a strong culture of operational planning, efficiency and delivering to target which we expect will endure long after his departure. We wish him all the very best for his future."

[deka1] 10/6/2020 09:07

Hi TF yes that's a big downy limo for mml,but I agree with steve about the location being a big pull back to the stock,but we can't do anything about that , hopefully the people of the Philippines can lol via the ballot box.

[tightfist] 10/6/2020 08:43

Hi Steve, deka,
.
Thanks for the Seeking Alpha appraisal, not very inspiring. I too have been progressively reducing MML during the last six months and putting my capital to use to great effect in more promising, undervalued, goldies where the BoD expresses a clear, expansive, fundable vision and has meaningful skin-in-the-game.....
.
Good luck! tightfist

[stevea171] 09/6/2020 11:38

A miner on ASX going places.
Light years different from MML.
I've bought quite a few in the past few weeks and ditched some MML.

West African Resources (WAF - ASX listed)).


The newest producing gold mine in West Africa.
They have built a 2km open pit mine and underground mine together with a processing facility from scratch since January 2019. Ahead of schedule and below budget.
First gold pour was in March.
Ramp up proceeding. 120k oz/year run rate for April and May.
Commercial production expected to be declared by end of June.
300k oz gold production the target for Year 1 which seems achievable.

Richard Hyde is an amazing guy and what is being achieved is beyond belief.
The lowest cost mine with AISC of $600 ($500 in year 1) in West Africa.
With the aspiration of having 3 or 4 mines over the next 10 years - look out Barrick!

sp at ATH 90c. Apart from everything else going for it, coming inclusion in GDXJ on June 19?

"GDXJ addition is still a guess at this point (though I think a very high probability based on the rules of the fund). A lot of big money in the market doesn’t guess, they just act quickly when a fact is confirmed.

I’ve been observing ETF moves in the gold sector for the last ~7 years and this sort of closing auction is fairly standard for the GDX and GDXJ. I’m expecting something similar on June 19 from the GDXJ if they are required to buy 30-40M shares of WAF."

9/6/20. PRODUCTION UPDATE MAY 2020
RAMPING UP TO FULL PRODUCTION AT SANBRADO Q3 2020

COVID response plan enacted - no material impact to operations
Continuous operations since 8th March 2020
Processing of oxide open-pit and underground development ore
Production for March 200.3Kt at 1.3 g/t Au 91.8% plant recovery
Production for April 238.5Kt at 1.3 g/t Au 90.7% plant recovery
Production for May 256Kt at 1.4 g/t Au 91.1% plant recovery

May. 11,560 ounces mined, with 10,530 recovered. An 8% increase on April.
Total production/recovered for the past 2 months is now 21,560/20,230.
Revenue of approx USD $34.4m. Development and Capex total $17m USD.
March 30 cash position was $57.5m. Now $70m. Improvement of $12.5m
This is a profitable mine already before the U/G and high grade open pit.

[stevea171] 09/6/2020 11:10

Medusa Mining: Digging Into The Q3 Results
Jun. 6, 2020 9:29 AM ET

Summary

Medusa Mining reported its fiscal Q3 results last month, reporting quarterly gold production of 24,800 ounces at all-in sustaining costs of $1,118/oz.

While the company is on track to meet guidance, we saw an underwhelming reserve update earlier this year.

At the current production rate, the reserve update amounts to just over 3 years of mine life unless the company can prove up new reserves.

Based on Medusa's inferior operating jurisdiction, industry-lagging margins, and short mine life, I see the stock as an Avoid.

We’re finally through the Q1 earnings season for the Gold Miners Index (GDX), and the clear leaders operationally were the Australian gold producers, with a near dearth of COVID-19 cases in the country. Meanwhile, Mexican miners got hit the hardest and are in store with a nasty Q2, with many mines shuttered in late March that only reopened this week. Medusa Mining (OTCPK:MDSMF) is an ASX-listed gold producer, but the company operates out of the Philippines, where its operations were mostly unaffected in fiscal Q3. Despite a lower cost quarter for the company, costs remained high relative to the industry average, and the combination of low reserves and weak margins is likely the culprit for the company’s lukewarm valuation. Based on the company’s relatively high costs, inferior operating jurisdiction, and short mine life, I continue to see much better opportunities elsewhere in the sector.

(Source: Medusa Mining)

Medusa Mining released its fiscal Q3 results last month, and the company reported quarterly gold production of 24,800 ounces, up 19% sequentially from fiscal Q2 thanks to increased mined grades at its Co-O Mine in the Philippines. Medusa’s all-in sustaining costs [AISC] for the quarter came in at US$1,118/oz, a significant improvement from Q2 AISC of $1,346/oz. While this was a material improvement on a sequential basis, the company’s costs remain well above the industry average, with the FY-2019 average AISC coming in at $975/oz. The other minor issue, though rectifiable assuming exploration success, is that the company’s reserve base continues to dwindle, as we saw in the reserve and resource update put out earlier this year. Let’s take a closer look at Medusa’s operational results below:

(Source: Company Presentation)

During fiscal Q3, Medusa Mining processed just over 129,000 tonnes of ore, tracking below the trailing twelve-month average of 141,400 tonnes. Fortunately, however, mined grades were much higher in the quarter, jumping 17% sequentially to 6.25 grams per tonne gold, which helped to drive the increased production in Q1. In addition, recovery rates remained stable above the 94% level and improved 30 basis points in Q1 to an exceptional gold recovery rate of 95.2%. These results have left the company on track to hit its FY-2020 guidance midpoint of 100,000 ounces at all-in sustaining costs of $1,075/oz, given that Medusa has produced just over 73,000 ounces year-to-date with one quarter to go. These satisfactory results have seen the company’s cash balance continue to trend higher the past few quarters, hitting a new high of US$32.5 million or more than 20% of the company’s market cap to finish fiscal Q3.

(Source: Author's Chart, Company Quarterly Report)

This improvement in the cash balance is a welcome development for shareholders as the next phase of the Co-O Mine is to establish a decline to access ore below the 12 Level, with a projected cost of US$48 million. Earlier this year, the company had noted that it should be able to fund development internally from its existing cash position and future cash flow, and the higher gold (GLD) price should embolden this plan. This is because Medusa should be able to generate increased cash flow over the next few quarters, with the average realized selling price came at US$1,601/oz in fiscal Q3, up 8% from the US$1,485/oz average selling price in fiscal Q2. Based on this positive development with the gold price, investors should not have to worry about any dilution or debt issuance in order to construct the decline, which is expected to take up to 36 months before it's complete. The company noted that not only will the decline add more flexibility to drill for new resources, but it could drive higher production as well, as the mill is constrained by the current mine productivity, operating at only 60% availability.

(Source: Company Presentation)

So, why does Medusa look so undervalued with a market capitalization of just over US$110 million despite 100,000 ounces of annual gold production, and more than 20% of its valuation in cash? The answer is the company's jurisdiction, and its reserve base, with neither being all that attractive. For starters, the Philippines was ranked in the bottom five jurisdictions worldwide among 70 total jurisdictions by the Fraser Institute last year in 2018. For anyone in disagreement with this ranking, OceanaGold (OTCPK:OCANF) could confirm the Fraser Institute's ranking, with OceanaGold's Didipio Mine sidelined for more than a year now. The other issue, however, is that the company's current reserve is sitting at a meager 332,000 ounces of gold, with total resources, which are inclusive of reserves, sitting at just 1.27 million ounces of gold. Based on reserves which are gold ounces with the highest confidence that they can mined, we are now down to just 3 years in mine life at the current annual production rate of just over 100,000 ounces. Therefore, there is risk around whether Medusa Mining can continue mining long term if it can't prove out new reserves soon.

(Source: Company Quarterly Report)

The good news is that the company has encountered solid exploration results at Royal Crowne, which is 3 kilometers from its mill. Still, these resources amount to only 50,000 ounces, and they are currently in the inferred category, the lowest confidence of resource categories. Meanwhile, the company has encountered high-grade mineralization below Level 16, which can be accessed once the decline is in place, but the depletion of the reserves will be occurring at a similar point to when the decline is completed, which is roughly three years. Therefore, in a worst-case scenario, it's possible that Medusa Mining could struggle to produce 100,000 ounces per year by FY-2024. While Medusa has been steadily producing gold for the past decade, we can see that the company has struggled to expand reserves, with reserve growth barely surpassing depletion. A strong balance sheet should help to fund exploration, and there is a genuine possibility that the company can start adding reserves by next year with more definition drilling at Royal Crowne. Still, there are no guarantees, hence why the market might be standoffish towards Medusa.

(Source: Quarterly Report)

Unfortunately, the other issue is that because the company must continue to spend aggressively on exploration to replenish reserves and has nearly US$50 million in development over the next three years, costs will likely remain high for the foreseeable future. Therefore, no matter how productive the company's mining is between now and FY-2023, it's unlikely Medusa will be able to push its costs much below $1,000/oz on an all-in sustaining cost basis. Therefore, investors are presented with a miner in the worst five jurisdictions in the world, with costs that are coming in 10% higher than the sector, and with a mine life that's in jeopardy unless we see a new discovery soon. This does not make for much of an investment thesis, with Medusa ranking in an inferior category to most producers across the board.

(Source: Medusa Mining)

While Medusa Mining might look cheap from an enterprise value per ounce standpoint to its peers at barely $90/oz as a producer, I believe the company remains cheap for a reason. There are few things less desirable than a miner in a country that's sidelined another miner's operations recently, and a short mine life certainly doesn't inspire much confidence there. Therefore, while Medusa is generating decent cash flow at current prices and margins have expanded with the rising gold price, there are several producers out there that are in the same position, except they're operating out of jurisdictions that are much more attractive. A rising gold price may lift all boats, but given Medusa's situation, I see the stock as an Avoid. There are far too many gold producers out there firing on all cylinders in Tier-1 jurisdictions that it makes little sense to invest in a Philippines miner with industry-lagging costs.

[deka1] 18/5/2020 08:44

Gold Price forecast for May 2020.
In the beginning price at 1699 Dollars. High price 1896, low 1685. The average for the month 1772. The Gold Price forecast at the end of the month 1806, change for May 6.3%.