Medusa Share Discussion Threads

[johnhemming] 04/2/2021 08:45

polaris - thanks for this. I wonder what Medusa do to return cash to shareholders. Do they do buy backs or pay a dividend from time to time?

[bushtuckaman] 04/2/2021 00:24

Yes, quite a few positives here that the market seems to have ignored.

As Polaris has stated, the cash build has got a insane levels relative to mcap.

The thing that interests me of late is the ongoing drill results coming from Royal Crowne Vein area. Some wide intersections of decent grade reported in the 300-450 meter depth range, do these veins continue up to shallow depths that are easily accesible I wonder?
Is this the ore source that will finally enable them to fill the mill. I believe the plants nameplate capacity is 2500 tons per day and currently is only 70-80% utilized.


Co-O head grade has be rising streadily every quarter for over a year. All looks to be ticking over nicely there.

I'm wondering though why they haven't started to crack on with the Co-O decline development, to eleviate the mine haulage bottleneck. They previously said covid had caused contractor delays etc. Then why not get inhouse personel to do it if that is the case.
Maybe they are delaying the decline to see if Royal Crowne can produce the goods.

[deka1] 03/2/2021 20:32

Polaris , good posts .

[polaris] 03/2/2021 19:28

If johnhemming reads this:

There was a report some number of years ago that suggested the resource was several M ozs. Chip - do you have the link to it?

Each year MML mine out and replace the reserves. They have never had much more than 400 k oz in that category but has been mining for over a decade.

There is a long history there...most of us here know that inside out. As a result, most of us left the building when MML decided to end its listing on AIM.

However, over the last several Qs, MML has managed to build a cash pile at a rate of $10-15 M per Q on a production profile approaching 100 k oz p.a., matching the heights of the mining boom valuation on AIM.

The market cap has $79.3 M of cash, US not AUD, in it too as of end December 2020. If they have 4 more Qs at a similar pace then the current AUD$0.85 is entirely covered by cash.

AISCs are much higher than 'cash costs' as the need to drill to firm up reserves is always on-going.

[polaris] 03/2/2021 11:27

Nice little up-tick on ASX last night.

Given what we know on the latest production numbers, there is scope to see share price increase steadily towards AUD$2+.

The next Qly is important for the FY guidance. At HY, MML look like they will blow guidance out of the water.

We all know that the BoD are not exactly shareholder friendly and this is also reflected in the share price However, don't think too many will argue if the H2 production and costs matches H1.

[jc2706] 22/1/2021 17:57

I think that we have all been there!

[tightfist] 22/1/2021 17:02

Hi JC,

I agree, in the end value will out - Somehow! Sometime! Fortunately I decided to progressively reduce my investment by 80%, then accelerating about 5 years ago - the capital has been a lot better placed elsewhere.

A most frustrating experience - and an object lesson in many facets of investing.

Cheers, tightfist

[jc2706] 22/1/2021 16:18

Tightfist,

I am very aware of the history of the company (I am sure that anyone who has followed gold for any length of time would be) so would go in with my eyes open (I am not in currently). At some point though the operational and financial performance of the company will be reflected in the share price if they keep churning out the numbers.

[deka1] 22/1/2021 16:13

Thanks for the input guys .

[tightfist] 22/1/2021 15:37

Hi C9AJL, JC2706;

Call me a cynic, but do you really believe those were their well-founded motivations?/rationale/excuses! Look at the CV of the Chairman and the relentless churn of CEO’s and you may come to other conclusions.....

Good luck, tightfist

[jc2706] 22/1/2021 14:32

I have also had a quick look at the last couple of quarterlies. There are things not to love about the company but operational and financial performance are not amongst them.

As with AAZ's RNS yesterday and CNG's today I had to reread them to make sure I had got it right. The financial performance is not aligned with the share price and I doubt whether this anomaly can last much longer despite the historic reputation of the company.

The biggest issue for me with MML is geopolitical. Has the Philippines changed in this regard? Or is there always going to be a sword of Damocles hanging over their heads?

[chipperfrd] 22/1/2021 14:11

Hi Polaris,

I have revisited my quarterly spreadsheet for MML after reworking the same sheet for HUM and Shanta.

I had decided to attempt some short term predictions based on quarterly figures for those other stocks and, given the results, thought the same reworking was in order for MML.

Went back to 2011 and then worked out annual EPS and target SPs using a PER of 10x.

Looks like the MML PER was more like 25x in FY11 for my model to arrive at the A$8.34 that now appears. I do remember selling a few tranches above £5, so this reworked model is probably about right.

For all subsequent years I have just stuck with a 10x PER and, as mentioned above, reached A$0.80 for June 2020 - which was probably about right.

Must admit I had not been keeping up to date with MML quarterlies as had rather lost heart with it in recent years. So filled in all the data from MML quarterly reports since March 2020 this morning.

I now look forward with some anticipation to the March 2021 numbers.

All the best
Chip

[c9ajl] 22/1/2021 14:06

The reason for delisting from London was cost, and the company couldn't justify the expense with the main volume being in Oz. Hopefully this can be revisited now cash flow has greatly improved, and this could be a catalyst to improving the company's share price!

[polaris] 22/1/2021 12:56

Hi Chip,

They will need a fair chunk for the decline works but that is now nicely covered in cash in hand. I think a part of the reason that the share price has stagnated is that many of the would-be investors either do not have access to ASX or the timing of market open doesn't match well with Europe. I had to pay slightly over the odds as i was buying in the first hour of trade. I noted that the price fell back in later hours and the pattern seems to repeat, so i'll be using order book from now on to expand my holding.

Back in the day, when we were all in this stock in the mining boom, the production was no more than the annualised rate of today, the profit per oz cf. AISC was, if anything, lower and yet the share price reached over £6 on AIM, or approaching AUD $10. While i don't expect that to repeat, i do think the AUD $4 is not overly stretching things.

Have to say i had to double-take the share price after reading the report and doing the conversions from AUD to $ and £. That included checking the production report again to make sure that it was in $ and not AUD $. Even then, it would have been under-valued.

[chipperfrd] 22/1/2021 12:41

Coming to the same conclusions as you guys!

Just been working through the quarterly report. Cashflow has significantly improved thanks to improved production and POG. If they can keep this up then surely at least some of this will feed through to the share price. One of my models is currently forecasting a move from 80c (30/6/20) to 412c (30/6/21)!!

And the quarterly growth in cash and equivalents is quite astonishing. It has gone from US$11.8m to US$79.3m in 9 quarters. Very overdue for a resumption of dividends!!

Clearly there will be increased Capex requirements once the new decline is finally in progress which will mop up some of their current free cashflow - but even so, their current numbers are more than enough to cover those outflows.

Is this stock finally making a turnaround? Certainly about time.
Chip

[polaris] 22/1/2021 09:16

I dipped a toe for the first time in quite a few years last night. Given the market cap and the cash pile and the last 2Qs of results, the price makes no sense. If they upgrade the FY target in the Q3 update, which seems almost nailed on, then MML will be back to a 100 k oz p.a. producer with AISCs around $1000.

It also has a nice cash pile once again, which is growing strongly Q on Q. $73.9 M in cash and bullion on hand cf. a market cap of $130 M. At this rate, the EV will be less than the cash-flow generated in 2021!

[tightfist] 22/1/2021 08:54

Hi deka,
.
MML Market Cap = £95m, H1 Net Cash Generated = £23m (possibly including some Working Capital movement) = Mad. Bumper dividend or passive ii awakening!?
.
Cheers, tightfist

[c9ajl] 21/1/2021 19:13

Medusa Mining beats gold production plan in the Philippines | Kitco Newshttps://www.kitco.com/news/2021-01-20/Medusa-Mining-beats-gold-production-plan-in-the-Philippines.html

[c9ajl] 20/1/2021 08:02

Quarterly Report https://www.medusamining.com.au/wp-content/uploads/2021/01/210120_dec2020quarterlyreport.pdf

[tightfist] 14/1/2021 14:33

Hi deka,

Surely they have well documented and trained-in systems for mechanical and electrical zoned lock-off? Just maybe the frailty of the BoD (ie lack of professional diversity) will come to the fore? More likely the buck will stop at Philsaga?

Moreover, it's terrible news for the families, tightfist

[deka1] 14/1/2021 12:33

Sad news two killed down the mine , i think they have had fatalities on the pumps before , sounds to me like no permit system in operation if they dont have a system they should be forced to set one up.

[goodgrief] 16/11/2020 19:35

Good News: operations resume after COVID outbreak
Bad News: we had an earthquake. Rattled a few buildings. But hey...

[deka1] 16/11/2020 09:56

Medusa Mining Limited


Co-O Gold Mine Update

Operations at the Co-O Gold Mine resumed on 3 November 2020 following a voluntary seven day suspension due to a small number of COVID-19 cases within the workforce
The operation has been disinfected and the workforce screened to minimise the risk of any further infection at site
Gold production resumed as planned with all functions across the operation performing well
FY21 production guidance remains between 90,000 to 95,000 ounces of gold at an All-In-Sustaining-Cost of between US$1,200 to US$1,250 per ounce
Medusa Mining Limited (“Medusa”; or the “Company”;) and its Philippines affiliate, Philsaga Mining Corporation (“PMC”), provides the following update on operations at the Co-O Gold Mine in the Philippines.

Following the identification of several members of the workforce who tested positive to COVID-19 in late October, the Company took the decision to suspend operations and place the site on care and maintenance for a period of seven days. This decision was taken in order to ensure the welfare of the wider Co-O workforce and surrounding community (refer to ASX announcement dated 26th October 2020).

A program of disinfection of communal sites was undertaken and all members of the workforce were tested for COVID-19 with the requirement to return a negative test before being allowed to return to site.

Operations resumed as planned on 3 November 2020 and gold production has resumed in line with plan. As previously indicated, the temporary suspension has not impacted Medusa’s FY21 production guidance of between 90,000 to 95,000 ounces of gold at an All-In-Sustaining-Cost of between US$1,200 to US$1,250 an ounce.

Measures to reduce the risk of COVID-19 infection at the Co-O site remain in place, including increased site hygiene, operating with a reduced workforce and conducting weekly regular testing of employees and contractors. The employees who returned positive tests remain away from site and in isolation either at quarantine facilities or home.

Commenting on resumption of operations, Chairman and interim CEO Mr Andrew Teo said:

“Temporarily suspending operations was the correct decision and we believe the risk of the further spread of infection at site (from the cases identified) has now been minimised.

Our workforce has performed admirably in the circumstances, with operations running in line as planned upon resumption.”