It is an fruitful exercise to take a look at the companies...

It is an fruitful exercise to take a look at the companies history to learn for the future. I agree that the right way to look at a company as MML is through the cash-flow statement. Because MML has chosen not to take on debt on their balance sheet all the money that goes out has to be earned first. The CFS (cash-flow statement) of MML tells you how it came to the point where it is now. Although not my specialty I will try to produce the following two tables (all figures in USD):

FY9/10 10/11 11/12 12/13 13/14 6mnths 14/15
Receipts fr. customers 78m. 132 92 126 86 62
Payments for receipts 40m. 36 30 31 36 26
Share issue 30
Net cash from op.activities 38m. 96 62 95 80 36


Investments prop&plant 8m. 9 26 43 20 9
Investm. expl.&evalution 19m. 12 14 10 8 4
Investm. development 8m. 31 47 45 45 23
Dividend payment 19 19 4
Total cash out 35m. 71 106 102 73 36

From the above you can tell that only in the FY 11/12 the cash out was substantially higher than the cash in. They could afford this because of the high level of cash during that year. For the rest of the years the management tries to at least match the cash in with the cash out. You can also tell that one of the first things the new management has done is make sure that the higher level of investments from the years 11/12 and 12/13 was brought in line with the proceeds from lower production in combination with a lower POG. They did that by stopping to pay a dividend, to lower the investments in property and plant and by the issuance of equity in nov.2013. So my conclusion from the above is that because of the choice to finance all the investments internally and not to take on debt in combination with the restart of the mine and the aim to increase the production towards a level of 160-170.000 OZ per annum, the shareholder has to wait some time. Wait for what? That is of course the ultimate question. In earlier notes I wrote that in my opinion the management has decided that they want to make the company trustworthy again and to deliver what they promise. By saying this I realize that they first have to deal with the legacy of the former management. Not an easy task. This is why I believe things take a littler longer than I personally had hoped for. But we can see that production is getting higher. This will bring the extra cash that is needed for to invest the necessary amounts to run the mine in a proper way and to annually produce the higher level of OZ, to invest in perhaps a second production location and to return to paying a dividend.
But I agree that the man agent has to prove this to the shareholders. They can do that by managing the investment budget and let the level of cash at hand climb towards a level where paying a dividend is a natural thing. So it will be very important to see in the next few quarters if the management can deliver the higher production of OZ and also be able of keeping more money in the company and not needing all the money for investments. With a revenue of USD 150 mln. for FY15/16 and a net cash from operating activities of around USD 85 mln. (55% of revenue) and an investment budget of USD 70 mln. the cash position will increase by some USD 15 mln. For the year 16/17 the revenue will be around USD 170 mln. and by assuming an investment budget of around USD 75 mln and a net cash in from operating activities of around USD 95 mln (55% of revenue) then the level of cash will be sufficient enough to start paying a cash dividend again. These are mine calculations of course. I would also like to see Mr. Davis to explain more about their calculation of the AISC for next year. Cost control is essential for MML to increase their level of cash at hand (see my tables above) and be in a position again to start paying a dividend. This will give the faith in the company an enormous boost and will lift the SP to a more appropriate level.