Knowing When To Hold Em or Fold Em, page-12

@stevea171 - I appreciate your sentiments.

Like you I hope the government looks at Medusa as a positive for its nation (as you've stated, with 5000 workers and millions in investment to date it's hard to believe that they're worse off as a result of Medusa presence).

Also it's not like I've completely sold out of MML - my post was more about not being able to be as bullish on it as I have been in the past... and more about it now having turned from an investment into more of a speculation.

I get your point about closing Medusa would mean that workers will lose jobs and the government wouldn't want that, but workers losing jobs clearly hasn't stopped them closing 3 mines already, halting planned projects that would employ locals.

So job destruction is not an issue for this government.

Also at the start of the month I thought MML being ISO14001 certified (according to their May presentation) would mean that a mine suspension was a very remote possibility, however when I saw that one of the first operators that Lopez suspended was ISO14001 certified I realised the certification meant little to a government that's got an agenda (and that's when I started selling).

What also concerns me is the combination of mine closures with comments by Duterte that his preference is for locals owning and operating the mines (not foreigners). That's just bad form and shows a lack of understanding of how wealth is created.

Capital and its ability to be combined with labour to produce a return (ie more capital) for society should be respect no matter its source.

So yes, I seriously think Lopez COULD suspend a mine like Medusa (that's not me saying she WILL, I'm just saying that it is now a REAL risk that wasn't present a month or two ago).

And in MML's case the risk is especially high because it only has one operating mine and not being a huge multinational I suspect it would be hard to have the wherewithal to fight the government legally.

We could debate whether the chance of a suspension is 3%, 5%, 10%, 30%... but to me it doesn't matter much, when your downside risk is close to 100% and your upside is unknown you're not really "investing" you're "gambling".

And I don't like high risk gambles.

And as the old saying goes, don't bet on anything that can talk.

So when a government begins talking and acting like this it undermines the investment prospects of a company anyway...

Shareholders (present or future) are not stupid, they know that government intervention could cripple the company at present so even if the Philippine government did give MML the all clear (for now) and MML was able to push production to 140k oz pa I doubt many institutional investors will pile into a single mine operation when the Philippines governments has only recently been suspending mines, pushing for increased taxation and preventing mining development.

So in my view, not only have the recent actions increased the potential downside, they have also significantly reduced the potential upside.

If I'm the MML board, I'd be thinking, get through this mining review. Stop all exploration beyond Co-O, drain Co-O of whatever ounces you can get and reinvest the capital in developing a gold deposit in a more favourable mining jurisdiction.

If the Philippine governments would prefer their people focus their labours on being an agrarian society of farmers and fishermen that are starved of foreign capital, then let them live the dream...

With that said, for those that haven't sold yet, if MML makes up less than 7% of your portfolio I don't think I'd be selling at these prices.

Actually if MML feel into the 50s with a decent quarterly and no news on a suspension I'd probably start accumulating again (albeit VERY slowly).

I look forward to hearing what the board thinks in the Annual Report.