The discussion of MML's AISC raises (again) a question of future...

The discussion of MML's AISC raises (again) a question of future AISC. I believe MML's "sustaining" capex will drop significantly in FY16 and beyond because much of the cost was more temporary than the name implies. Consequently, MML's AISC will fall below $900 in FY16 (maybe in FY15) and further still in FY17.

My reasoning is as follows: We all know MML poured a lot of money into mine redevelopment and expansion, and more than was originally budgeted and almost certainly more than one would consider efficient use of investor money. The recent Deutsche Bank report on OZ goldies AISC revealed that MML had massive sustaining capex compared to others. See my Dec14 post on this, with the exhibit:
http://hotcopper.com.au/threads/ann....2431018/page-3?post_id=14513020#.VQXM70Iz4Q5

This suggests that MML's sustaining capex in FY13 and FY14 (and maybe FY15) were abnormally high, whereas capex for FY16 and beyond will regress toward the industry mean, or at least the mean for underground mines in lower wage countries. Therefore, I expect MML's AISC will drop well below $900/oz in FY16 and further still in FY17.

Whether this predicted drop in AISC increases the probability of a dividend, well, maybe. But dividends are more affected by cash flow and growth plans. Both of these factors may favor a return to dividend payments at MML, but I would still give it at least a year.