MML - London Presentation report 16/4

London Presentation report.  

Geoff Davis, CEO and Rob Gregory, COO both there. They were in Switzerland at a conference on Wednesday, seeing about 5 institutions in London + Evening do on Thursday. Friday seeing more institutions then flying back to Auz on Monday 19/4. A lot came out about operations that you don't see in any reports. Q3 results were not mentioned but will be released probably soon after return from Europe.

From my notes of the presentation in Mayfair 16/4/2015.

1. There was no video recording made of the presentation so there will be nothing to view for investors who could not make it.

2. Relisting. No LSE listing on AIM or main market in the short term. This is a board decision. If it is relisted at all it would be quite some time ahead ....

3. New Service shaft. Completion approx 15 months from now. Then production increase to 2,700 t/d from 2,400 t/d now ie

68,000 ton/mth x 3 mths/qtr x 7.2 gm/ton / 31.1 gm/oz x 95% recovery = 44.9k oz/qtr = 179k oz/yr

This will be the theoretical maximum for the mine/mill at Co-O, so the 200k oz/yr figure is no longer used.

Mine should be operating at 7.2 gm/t, not 5 gm/t. Rob expects progress towards this 7.2 figure as a result of a new payment system for the miners that is becoming effective now and will be complete in 10 mths time.

94% or 95% recovery is seen as the likely upper limit for recovery (93% now).

L8 shaft currently operates with skip plus man cage. In the future it will have just the skip for materials only. It will operate twice as fast as now and will be available for lifting at all times. New Service shaft will take the existing man cage so will be dedicated to men/services etc.

4. New L16 shaft. It will be located on the other side of the river where no shafts exist currently. Construction may start following on completion of the new Service shaft. Approx 4 yrs to build. Possible cost circa 4 times the $10 million for the new Service shaft. Workshops and other services to move across the river at the same time.

5. Gold from Co-O is sent to Hong Kong for refining (not Perth Mint!)

6. Takeover offers. No predators about that Geoff knows of. Geoff says their saving grace is that not too much is known about narrow vein mining so this reduces interest. Last attempt was at approx $1.20/share by a Hong Kong company a few years ago which came to nothing.

7. Dividend. Not in prospect for now. Company wants to build a decent buffer of cash first.

8. Rob said he and Geoff have made a pact to effectively not over egg the pudding. After 13 successive quarters of not meeting guidance under PHB and what this has done to the credibility of the company they want to establish that those days are past! So under promise and possibly over deliver is the current MO, with revisions upward to be the norm as they go along.

9. Bananghilig and Guinhalinan.
Bananghilig is a huge system of diaframe breccia, some kms across, and larger than would be found usually. They are not going to spend money drilling endlessly this structure to prove up a larger resource. They have some expert re-logging all the drilling they have done - 80-90 km in total which will give better interpretation. This is to be ready in Sept quarter. Drill 1 new hole? In order to keep licences they have to show the Government that they are still working on them.

Guinhalinan. Very prospective but needs a lot of work incl new drilling. It is too early to say whether Guin or Banan will be the better prospect for future development of a new mine. There are issues with land occupancy at Banan that don't exist or are a lesser issue at Guin. In the future Guin could overtake Banan and be developed first. They would not spend $100 million up front on a new mine. They would develop something on a smallish scale for low cost and then add to it later as part of cash conservation. No RI/cash raising in prospect. Manila can levy higher tax on them in future if they can ever agree on new legislation for miners but cannot increase royalty or retrospectively alter terms of existing licences

10. Geoff would like to get back to his golf to get his handicap down but it is likely he will be staying on for quite a bit yet. Rob is just 100% concentrating on being COO incl spending 2 weeks at a time (per month?) on site at Co-O and then going back to Perth. Rob it seems to me would make an excellent replacement for Geoff. He has good experience of the Phillipines incl working with the government there on developing new regulations for the mining industry. Personality wise he is well grounded, modest, approachable. He is unlikely to become an instant empire builder. He sees no need for take overs of other juniors as other companies don't have the likes of Banan and Guin for expansion and continuity.

Medusa offers the prospect of production and development over the next 20 years or more that other gold miners can only dream about!