Ann: Full Year Results 2015, page-69

For many people it is difficult to value a company. This is the same for MML. But with some effort it can be done. MML under the new management first had to give all their attention (after all it is a junior miner with a developing mine) in solving the problems the former management left. I think they have been successful in doing just that. Now they have reached a point in time where the " repairmentwork" is almost done. They will reach a production level of somewhere between 125.000 - 150.000 OZ for the coming 4 to 6 year. The proven reserves can back this. It is also understandable that during this development phase of the company and their conservatism in spending their cash the management didn't spend so much cash on finding new reserves. They can only spend their money once and they don't want to bring on debt in their balance sheet. Having said that I also realize that the next phase is coming around the corner for MML. For this year they have kept their level of reserves at 604.000 OZ. But looking ahead they will need to find more reserves to make sure that the mine keeps going. Up till now management have always said that although the reserves are not "in the books" they are confident there is enough in the ground to make that promise happens (as is the case with all narrow veins mines). So it is time for MML to do just that. They must speed up their drilling effort to make sure that the yearly depletion is at least replaced with new reserves. If they succeed in that (so far they have been doing that for the last 5 years) they will make a positive track record which will enhance the value of the company. So it will be interesting to hear from the management in the next AGM how they see their strategy in keeping the reserves at a sufficient level so that shareholders will get some sort of comfort out of that. I would like to hear from the company how they see the reserves evolve in not only the CO-O mine but also the other projects. Because the development costs are in the AISC-benchmark it is advisable for the management to give their shareholders a really good feeling about the level of AISC in the coming years. This will decide on the value of the company. If the are able to bring down the AISC to for example somewhere around the $ 800 level and the POG will be in the area of $1000 - 1200 level for the next few years, the positive cash flows are a simple outcome. This is a basis to value the company.

About the discussion over the impairment and not being a cash-outflow. Truly this is not an interesting discussion. The money is already spend in the last years. The bookkeeping rules are so that you may activate those costs but you have to make amortization and depreciation costs every year. Because of stricter rules and a lower POG MML was obliged to make an impairment. So they did and for the next years they will see a much lower level of apr/depr.. But to be honest I am not so much interested in the calculation of the yearly profit. It is the cash-flow statement which tells it all. Their you see what flows into the company and out of. Because of the heavy investment program in the last few years and of the policy not to take on debt, their was no room for any dividends. They even had to do a issuance of shares to finance for the investments. So in the next AGM the management has to guide us on de level of cash out in the next few years. This year it is $ 71 mln. I would like to know the level where it is going to and when. The production is known for the next few years, that leaves only the POG as the unknown. If we know that factor the cash flow statement is a simple exercise. By mentioning that the next phase is around the corner for MML I mean that it is time for the management to guide us on that. They have worked out the current problems in the mine, it is time to give the shareholders an insight into the next few years. An insight on costs developments and the level of reserves.
This guidance will be a leading factor in valuing the company.