Ann: Half Year Results December 2015, page-64

Fangk,

All miners have to submit their accounts in the same fashion. The P&L does not include Capital expenditures or Dividends. For those you have to look at the Cash Flow Statement.

MML has very low Operational Costs (around US$470/oz incl G&A) but it has higher sustaining costs relative to open-pit miners because of it's essential ongoing development costs which enable new stopes to be brought online.

It is also necessary to keep abreast of the Balance Sheet statements as these reflect how well or not liabilities are being contained relative to current assets.

It is only when you put all these things together that you get an overall picture of how well a company is performing relative to it's peer group.

The AISC metric was brought in to provide a far better guide to actual ongoing costs of running mining operations than just the simple Cash Operating Costs which the financial reporting format portrayed - and quite right too!

In the case of MML, the quarterly reports actually provide the Cash Operating Costs as well as all the other costs involved in running Co-O (ie G&A, Exploration, Development & Plant Capex). According to my calculations all of these outlays are included in their AISC calculation (as I have been getting a close agreement over many quarters) and all of these costs are also included in the financial statements in either the P&L or Cash Flow statements.

Reference your point about the lower OPCF than NPAT: be aware that the Cash Flow Statement indicates that suppliers were paid more than the previous 6-monthly period. This becomes clear when you cross-reference to the current liabilities in the Balance Sheet Statement where it can be seen that Current Assets rose US$6m and Current Liabilities fell by US$4.3m over the 6 months, which added US$10.5m to Working Capital.

One new idea for comparing the 'goodness' of mining companies has been advanced by Micky Fulp working with Cipress Capital. They are suggesting something called the 'Adequacy Ratio'. This is effectively dividing Revenue by the sum of OP Costs, Investment Outflows, Dividends, with the resultant needing to be better than 1.0. I quite like this approach and I am currently using it across the 70+ PM stocks which I try and assess annually/bi-annually.

I hope some of this helps
CPDLC