first a reaction to the selling of some 800.000 shares by Mr....

first a reaction to the selling of some 800.000 shares by Mr. Davis: he sold this somewhere in FY14/15. I could not find the date of the selling. It can well be that he done that just before he stepped back in the company, so that was august last year. He still owns some 3,2 million shares which he didn't sell, nobody else from the management team did. There can be lots of reasons why he sold his shares. Perhaps somebody can ask him for the reason why he sold the shares on the shareholders meeting in november. Most of the times the answer is straightforward.

I find it positive that MML gave an announcement about the impairment of 260 mln.. Regardless what it says, the company picked up on the volatility of their stock and responded. The main message was: market circumstances changed and the accounting policies prescribes a proces as described in note 13 (which was part of the announcement) about a possible impairment. There is no change in the future of the mine. The impairment will be followed by lower depreciation and amortization which will increase future profits. Ofcourse it would have been better to explain it in the first place, but we must not forget that it is "only a junior miner" and not a big multinational. To make a mistake (this time in communication) is possible. We see this all around the world. More important in my opinion is how they handle the "after sales". MML did the right thing to issue the " impairment announcement".

Because MML has quite a straightforward cash-flow statement is it not so difficult to make a "best quess" for the FY 15/16 and FY 16/17 with the following assumptions: production for FY 15/16 is 125.000 OZ (the middle of 120/130.000) and for FY 16/17 it is 140.000 OZ; no changes on the debt side (no new debt and no redemptions); a POG of 1100 and a 47% payment to suppliers as of the " receipts of customers". The 47% is the same as the FY14/15 but is higher than the last years, so I am on the conservative side. On the investment side the cash outflow for the year 15/16 is 71 mln (as indicated by the company and including of the 10 mln. of the extra shaft), for the year 16/17 I am also conservative by no lowering the 71 to 61 mln (71 -/- 10) but only to 65 mln. For the year 15/16 (this year) this least to a net change in cash of + 1,87 mln and for the year 16/17 in + 16.620 mln. All USD.

The figures above, in my opinion, reinforce the feeling that management is following the right strategy but it can not be done in a few months. After the former CEO left the company, Mr. Davis and his team do the right things. Unfortunately they cannot influence the POG. The decrease from a more comfortable level of 1300 to the 1100 level does not help the company. The company must provide flexibility to cope with a lower POG. This is, in my opinion a crucial factor in the coming two years for a possible rehabilitation of MML. I would like to know from the management what the " all in costs" per OZ will be after the investment program on infrastructure has ended. And by that I mean a little bit more than the word " competitive". By then the full potential of MML must be visable for investors.

The decreasing stock price is painful for the ones who do own the stock. But it is my opinion that this is the time the shares change from the " weak hands" to the "strong hands". If MML is able to increase the production to the 150.000 level and perhaps even higher if the other projects deliver some gold reserves in the future, and is also able to bring down the " all in costs" to a level of around $ 800 per OZ then the cash-flow statement of MML will be much better than the ones above. MML will then be able to restart paying a dividend and the price of the shares will then be a "mirror" of the fundamentals of MML. The most preferred scenario is that when the POG will climb towards the 1250/1300 level again. If that happens we will see a price of the shares in dollars, not in cents.