Undervaluation, page-2

Whilst I think MML is a buy at these levels if you're bullish on gold longer term (which I am) I'm not sure if O’Shaughnessy methods apply to a mining company because of the finite nature of a mine.

Ie a mine trading on 2 times EBITDA might be overvalued if the mine only have 1 years worth of minerals to mine.
That said, with every cent that MML drops and every passing month I think MML becomes better value, because I believe once MML de-bottlenecks its mine a number of other factors will begin to fall into place for it (and its share price will go up accordingly).

Firstly:

- reducing AISC (hopefully by 10 - 25%)
- increase production (hopefully by 20 - 30%)
- increasing FCF (hopefully to over $10m a quarter)

I suspect the market will respond positively to these developments. As a result I suspect the following will become likely:

- increasing share price leading to re-inclusion into ASX300 and potentially GDXJ (if it gets good drill results) which will also boost share price
- reinstatement of dividend which will increase interest in stock
- fund to continue exploration and increase reserves which will increase share price if able to cost effectively add reserve ounces

So I think MML is undervalued - but not because of its PB, PE, of PS ratios.
And I think if MML operations and capital investments are going to plan we should start to see this get reflected in the share price early next year.

But I don't think market will front run these positive developments, because MML has been such a disappointment previously and gold has negative sentiment again.

Market will want to see runs on the board before taking notice or substantial life in gold prices.