Peers, page-10

Continuing my theme of the earlier comparison table:

Let us take it a bit further. The gold price has averaged US$1,262/oz since 1st July but now looks set to fall to an average of c. $1,200/oz by the end of 2014.

So if we take a view on what Income statements will look like at the turn of the year we can expect lower revenues per sold ounce over this 6 month period for all gold producers.

From that revenue we need to allow for deductions for Production Costs, Royalties, Inventory Movements, Depreciation & Amortisation, Exploration & Evaluation and Administration charges. Then there will also be the costs of servicing finance (debt) before getting to Earnings before Tax (EBT).

Note: I have included D&A even though it is a non-cash charge to the Income Statement (given that the money has already been spent when the expenditure was originally capitalised. But it does reduce EBT and the bottom-line NPAT/EPS, so from the point of view of the expected reported figures, it should be factored in.

Table data comes from the reported accounts as of 30th June 2014. I have translated all P&L costs into US$ in order to get a fair comparison. The 3rd column shows the debt maintenance cost as a percentage of OP Cash Flow and would be expected to further reduce EBT after these finance costs are included.

Highest to lowest.
Stock, P&L Costs, Debt Maint%
NCM 1401 17%
SLR 1347 14%
KCN 1291 37%
SBM 1212 221% (although large impairments may reduce D&A component)
EVN 1126 7%
EVR 1104 29%
PRU 1034 8%
BDR 1017 81%
NST 969 2%
RRL 928 2%
OGC 887 4%
MML 774 0.02%

So it looks a no-brainer that the top 4 will report negative earnings at the 31st Dec 2014.

EVN & EVR look unlikely to have a positive NPAT, maybe breakeven is the best that can be expected.

The bottom 6 should have varying degrees of positive earnings but may struggle to equal their 30th June figures.

People here will no doubt continue to push their perceptions of MML's AISC/Cash Calls/whatever, ad infinitum, but I think we can say with some certainty that at least MML will be able to report yet another positive figure for NPAT. Which is a bit more than can be expected for many of the other stocks listed above.
CPDLC