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MML

2.41%

85.0¢ medusa mining limited

Undervaluation, page-7

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able77

1,616 Posts.

34

16/12/16

02:02

Post #: 21378002
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Originally posted by cncventure ↑

Whilst I think MML is a buy at these levels if you're bullish on gold longer term (which I am) I'm not sure if O’Shaughnessy methods apply to a mining company because of the finite nature of a mine.

Ie a mine trading on 2 times EBITDA might be overvalued if the mine only have 1 years worth of minerals to mine.
That said, with every cent that MML drops and every passing month I think MML becomes better value, because I believe once MML de-bottlenecks its mine a number of other factors will begin to fall into place for it (and its share price will go up accordingly).

Firstly:

- reducing AISC (hopefully by 10 - 25%)
- increase production (hopefully by 20 - 30%)
- increasing FCF (hopefully to over $10m a quarter)

I suspect the market will respond positively to these developments. As a result I suspect the following will become likely:

- increasing share price leading to re-inclusion into ASX300 and potentially GDXJ (if it gets good drill results) which will also boost share price
- reinstatement of dividend which will increase interest in stock
- fund to continue exploration and increase reserves which will increase share price if able to cost effectively add reserve ounces

So I think MML is undervalued - but not because of its PB, PE, of PS ratios.
And I think if MML operations and capital investments are going to plan we should start to see this get reflected in the share price early next year.

But I don't think market will front run these positive developments, because MML has been such a disappointment previously and gold has negative sentiment again.

Market will want to see runs on the board before taking notice or substantial life in gold prices.

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This is all very good and MML has been working at this for a long time now! I have sold out sometime ago and am not at all tempted to buy back in. I had the stock when MML had the deaths at the mine and should have sold out with the first one.
The problem with this company is it's Name! If the name was changed it would change very thing.
Do a search on the meaning - the company name itself will NOT bring a blessing but a curse and therefore the share price follows -

MML Price at posting: 45.0¢ Sentiment: None Disclosure: Not Held
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Undervaluation, page-7

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