Ann: Quarterly Report March 2016-MML.AX, page-14

Thank you Loki for your thoughts. I would like to add the following: overall some disappointment with me about production and grade. I know it can be explained by the works done in and at the mine, but still a disappointment. But in this disappointment I noticed the following: the financial part of it all is in control. It looks like the management is adapting the level of spending to the level of production. Total spending in the quarter ending dec15 was USD 15,3 mln on exploiration/capital works/mine development and overhead. In the march quarter it was USD 11,8 mln. Next to this I get the feeling that what management is telling us (i.e. the new CEO) in the report, is what it is. I don't have the feeling that something is withheld. I also like the few words in the report where the management says that they are reviewing some possible opportunities to eland their tennant in the surroundings of the mine and even are willing to review the possibilities of starting some stand alone mining operations in the Philipines or even other parts of SE Asia. Especially the first option is interesting. Better put your money where there is value to be found than keep on pooring money in a project where the economics are against you.
What about the june quarter: with a total production of 108.000 OZ this leaves a production level of 24.850 for this quarter. Will MML be able to increase the cash level: by assuming a POG for this quarter of USD 1.210, a cash cost of USD 490 per OZ (to be conservative) and costs of exploiration etc of USD 13 mln (so more than last quarter) this will bring to the table a total cost of USD 25,2 mln, so a AISC of USD 1.013 per OZ. The margin therefore is 1.210 -/- 1.013 = USD 197. This brings the expected cash generation (based on my assumptions) to a level of slightly less than USD 5 mln. For me this is not bad considering all the work done in the mine. Once this is over the picture will be different. I agree with Loki that a level of 150.000 OZ per year is possible. When MML is able to bring down the AISC to a level of USD 850 per OZ and with a POG around the current level (say 1.200 to 1.250 a mean of 1.225) then the cash generation on a annual basis is USD 56 mln (150.000 x 375 margin per OZ) or 0,27 USD per share or 0,35 AUD per share. If this is the case then MML is more than able to pay a dividend again of 0,10 AUD. This will help the SP to a competitive level compared to its peers.