Undervaluation, page-31

Thanks for your view and analysis. It's appreciated.

I'm a little more optimistic.

If you take management at their word and believe guidance (and I do because I think it was downgraded aggressively and now seems achievable without everything going right) then personally I think the chances of a capital raising are remote (ie less than 10%) whilst the gold price is above $1100.

I say that because I think the worst of the cash burn is over.

Using the new mid-guidance MML will produce 90k at an AISC of $1300 over the year, which means that from here they'll roughly produce ~51k at an ASIC of ~$1220 over the next two quarters.

Yes, Q3's production will be lower and AISC will be higher, but I'm still only expecting the cash burn to be in the $1.5m to $3.5m range.

And in Q4 it will switch from burn to build with my expectation being that they'll put $1m to $3m into the bank in Q4.

So assuming the gold price holds around $1200 and there are no major issues at the mine I don't see a capital raising as imminent, especially given that the cash burn is (hopefully) only a very near term timing issue depending on a project's completion.

And if needed they can cut back on some non-immediate or discretionary expenditure (ie exploration, sustaining capex, repair and maintenance, etc) if necessary to squeeze a couple of million from the budget until they get to the positive free cash flow of Q4 and I'm sure they wouldn't have any trouble securing whatever short term debt facility they needed if the gold price is around $1200.

So every weeks that passes with the gold price above $1100 makes the likelihood of a capital raise more and more remote. And if we get to mid March with no announcement of a capital raise then you can be fairly certain there won't be one.

Then if Q1/Q2 in FY18 goes to plan then conversation about MML will switch from "IF MML will make money" to "HOW MUCH money is MML going to make".