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Hi all

 

Has anyone got any views on Medusa Mining listed on AIM and the ASX? They are targeting production of 60,000 oz of gold this year and 100,000 oz next year. Their production costs are just over $200 per oz, which seems incredibly low to me. With gold at current levels and being unhedged they are on a PE of 6.

 

The recent drilling report suggests a decent resource upgrade (they currently have 1.2m oz), will be announced in July. Management hold a good chunk and Sprott Asset Management recently took a stake. The one slight concern I have is they are in the Philippines.

 

I’d appreciate people’s thoughts on this as the stock looks undervalued imo.

 

Jim

 

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I'm not really buying at the moment. I have my eye on Hawthorne( CA"HGC)

 

I see - & wonder if this will perk up HGC - not one I hold mind you

 

And I thought Proactive were a stock picking outfit :angry::angry::angry::o

 

http://www.marketwire.com/press-release/Ha...GC-1006457.html

 

Hawthorne Gold Signs Contract with Proactive Investors Limited

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 19, 2009) - Hawthorne Gold Corp. ("Hawthorne" or the "Company") (TSX VENTURE:HGC)(PINK SHEETS:HWTHF) announces it has entered into an agreement with Proactive Investors Limited ("Proactive"), to provide marketing services including shareholder communications for the Company for a period of 12 months, commencing June 15, 2009. The agreement will include banner advertising, company editorial snapshots on a quarterly basis, coverage of material news releases to the readers and subscribers to Proactive, dissemination of Proactive news coverage and articles through other newswires and news services, MP3 audio interviews and a profile of the Company on the Proactive website. Proactive will receive a fee of $8,000 for the 12 month period.

 

The agreement is subject to the acceptance of the TSX Venture Exchange. The Company and Proactive are at arm's length.

 

 

 

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  • 7 months later...

Medusa Mining reveals record breaking first half, net profit up 201%

 

In the six months ended 31 December 2009, Medusa Mining Limited (ASX, AIM: MML, TSX: MLL) achieved new company performance records, reporting half-year net profit of US$28.3m, representing a 201% increase from US$9.4m in the corresponding period a year earlier. Revenues grew by 161% to US$41.3m. The emerging gold miner’s record-breaking performance was driven by both increased gold production, lower costs and higher received gold prices, it said.

 

Medusa produced a record 39,162 ounces of gold from its Co-O mine in the Philippines during the half-year, representing a 105% increase from the same period in 2008. Production averaged grades of 16.65 grams per tonne (gpt) gold, compared to 12.71gpt in the six months to 31 December 2008. Average cash costs were reduced by 16% to US$189 per ounce during the period, compared to USS$225 in 2008.

 

"The company has regularly broken its production targets on a quarterly basis and I am extremely pleased with the total of 39,162 ounces for the half year”, Medusa MD Geoffrey Davis commented. “This record production, coupled with a healthy gold price received, has contributed to a record half-yearly net after tax profit figure of US$28.3 million. Furthermore, the very low production costs of around US$190 per ounce should be highlighted”.

 

For the first half, Medusa achieved 228% earnings growth to US$31.5m, equating to basic earnings per share (EPS) of US$0.16, representing 158% growth compared to the same period previously. Furthermore, the improved revenues and earning have resulted in a substantial improvement to Medusa’s cash position. The company stated that it is currently debt free and had a cash balance of US$35.5 million at 31 December 2009, up 788% from the US$4m at 31 December 2008.

 

"Remarkably this has all been achieved through a period of intense re-development of the Co-O mine and associated infrastructure, and with the expansion programme now complete, our team can concentrate on optimising current production levels at the Co-O mine”, Davis added.

 

Medusa said that Phase II of the expansion programme is on schedule, and the program’s incremental benefits are flowing through as evidenced by the record gold production of 39,162 ounces for the last six months. Phase II aims at bringing Co-O’s annualised production to 100,000 ounces.

 

Proactive investors - Medusa Mining

 

Here's the interim financial results in full Medusa Mining - interim financial results.

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The Full Extent Of The Upside At Medusa Mining’s Co-O Mine In The Philippines Is Still Widely Unappreciated

 

By Our Man in Oz

 

Miners love them. Investors are never quite sure. The point of contention? - epithermal veins, those sometimes gold-rich seams of mineralised material which splay off in all directions in the geological aftermath of an ancient, and explosive, volcanic event. In places, the veins yield astonishingly rich grades of gold, but tracking them is the devil’s own job because nature rarely works in a straight line. Understand the tricky nature of “vein mining” and you start to understand why Medusa Mining took a while to catch the eyes of all but the most skilful stockbrokers. One money man did grasp the potential of Medusa’s Co-O mine in the Philippines early on was London broker, Bob Catto. Bob’s not only been a keen follower of the triple-exchange listed Medusa (AIM, ASX and TSX), but has even had a little bit of those far-away islands named after him.

 

The Catto 1 and Catto 2 veins are not big compared with some of the other 33 veins identified so far at Co-O. But they do jump out to the eye of a casual observer like Minesite’s Man in Oz as a good starting point for a conversation about what exactly Medusa has got at Co-O. So Minesite’s man duly called on Medusa’s management this week for a first-hand explanation of how the company has managed to become one of the gold sector’s top performers, with a share price that has soared from A$1.32 to...

 

Minesite - Medusa Mining

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  • 2 weeks later...

Good to seem Medusa is a new company recommendation in International Speculator - should raise awareness in North America

 

Louis James who writes the publication for Casey, just introduced the company to his subcribers, with a history of MML and spoke of its top flight mangement team, but felt the co was nearly fully valued for now, but with a great future, kind of buy the first tranche, but don't chase it, because MML doesn't trade very much as of yet on the TSX, so it's not very liquid.

James felt if you could buy it here, because of the volume on the ASX it would be okay to chase it a little.

James felt the number of ozs still an unknown, but the future was great, but still no one has drilled very deep as of yet, however he made the comment that they have been very frugal in spending money, and have accomplished quite alot in a short time.

 

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  • 7 months later...
Good to seem Medusa is a new company recommendation in International Speculator - should raise awareness in North America

 

Louis James who writes the publication for Casey, just introduced the company to his subcribers, with a history of MML and spoke of its top flight mangement team, but felt the co was nearly fully valued for now, but with a great future, kind of buy the first tranche, but don't chase it, because MML doesn't trade very much as of yet on the TSX, so it's not very liquid.

James felt if you could buy it here, because of the volume on the ASX it would be okay to chase it a little.

James felt the number of ozs still an unknown, but the future was great, but still no one has drilled very deep as of yet, however he made the comment that they have been very frugal in spending money, and have accomplished quite alot in a short time.

 

 

Does anyone follow MML? They have just hit another all time high. Very encouraging drilling update from their Co-O mine last friday. Early days, but it indicates to me that managment could well sanction a new mill (they can fund this from internal cash flow) which would allow annual production of 200k oz (v 100k oz currently). They are spending $21m on exploration this year and working towards feasibility study in 12 months time for an open pit mine at Bananghilig - this could come into production is end of 2013/2014 and boost annual production to 350-400k pa. The grades there look very encouraging. There is plenty more growth left in MML imo (still on forward PE of under 10) and i'd expect more institutional interest now it's on the main market.....

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  • 6 months later...

Latest corporate presentation from Medusa. They now have clearly defined production targets – nice steady increase to 300k in 2015 and 400k in 2016. Expansion of existing mine and new mine will be self funded so no shareholder dilution

 

Nice to see the shares have hit a new all time high today (on both the LSE and ASX)

 

http://www.medusamining.com.au/newsroom/asx/2011/110518_presentation.pdf'>http://www.medusamining.com.au/newsroom/asx/2011/110518_presentation.pdf

 

 

This is taken from the advfn MML bulletin board. I also attended and came away believing there is a lot more to come from Medusa

 

marben100 - 23 May'11 - 17:25 - 16482 of 16496

 

I managed to squeeze my way in to one of the presentations, which Geoff gave today. After the presentation, I asked if he'd be willing to do a presentationthat was more accessible to PIs in future and am pleased to say that he agreed.He's expecting to next be in London in November and I'll try to put somethingtogether then, so that anyone that wants to can come along. If you'd beinterested, please contact me via Stockopedia at http://www.stockopedia.co.uk/contributors/marben100/(use "send message").

 

Here are some brief notes from today's presentation (see http://www.medusamining.com.au/newsroom/asx/2011/110518_presentation.pdf):

 

- Medusa is expecting to maintain the dividend at 2x 5c payments annually, forthe time being.

 

- Co-O and B'hilig investment over the next few years is expected to total$280m, which Medusa intends to self-fund [so it's understandable that theydon't want to go overboard on the divvy yet, despite having $15m of freecashflow per quarter!]

 

- I asked about the outlook for grades. Development (in preparation for plantexpansion) continues apace, which lowers average grade - but they're stillfinding 8-10g/t in the development ore. The company is targetting goldproduction levels rather than grade. The new leach tanks will add flexibility,allowing a higher volume of ore to be processed, but gold output won'tnecessarily increase at an early stage. A lot depends on what is found.

 

- Note that development ore depletes resources but not reserves (only stopesare taken into account when calculating reserves).

 

- Explo drilling at Co-O is aimed at maintaining the resource levels. Reservesmight be expected to increase slightly as development proceeds. A drillingannouncement is likely in the first half of July and a resource update in lateJuly (possibly reserves too?).

 

- The Saga shaft is expected to reach level 6 by the end of 2011, when orehaulage can be installed. The shaft will then be extended to level 8. Oncethat's done, explo on the deep copper prospects at Co-O can be undertaken.

 

- Geoff is confident of the timetable for permitting Medusa's projects (asshown in slide 8), as the company is very experienced in this process and hasan excellent rapport with Philippine authorities.

 

- The B'hilig plant will probably be around 4mt p.a. capacity - much largerthan the new Co-O plant.

 

- A B'hilig update can be expected in the September quarter. A 1Moz reserve (5years production) is needed to proceed with the project. Whilst not discussed,I don't expect a reserve to be declared at this stage. That can only come oncefeasibility has been established.

 

- Geoff (and the geologists analysing it) appears very excited by the Tambisdistrict, which may offer similar prospects to Baguio, north of Manilla, fromwhich 25Moz of gold have been mined so far, with a further 25Moz likely.

 

- If early explo of the copper prospects is successful, Geoff's intention is tomonetise these assets, rather than for Medusa to explore/develop them furtherthemselves. These are large prospects which will be expensive to explore &study to BFS level. However, Medusa has already been approached by somenoteworthy mining majors expressing an interest in these prospects. Onceinitial explo is complete (and subject to success) Medusa will look to retainan interest but (effectively) farm out expenditure commitments. NB this doesn'tapply to the Co-O copper prospect which Medusa will continue to explo on awholly owned basis for some time to come.

 

Cheers,

 

Mark

 

Couple of extra points: Roy (CFO) described it as a "share in alifetime".

The strategy is now clear: Organic, self funded growth - a) Continue to develop Co-O up to 200,000oz supported by new Mill/plant - full benefits by mid 2013 -B) Bring Bananghilig on stream as a 200,000 oz open pit mine by 2016 -c)Continue with Gold exploration projects with view to identifying and developinga third Gold mine to be phased in after Bananghilig. (scope for big targets& further large scale mine.) d) To prove up some of the vast Copperresources (9 potential projects) and then monetise as they are not Copperpeople. The funds raised would not be required for the Gold developmentprogramme (a-c) and could therefore be returned to shareholders. Newsflow:Drilling announcement mid July. New Resource (possible Reserve) statement lateJuly. Bananghilig Verification Report Sept/Oct. BFS Q2 - 2012.

The Co-O mine just gets bigger and they are going deeper, plus a new 1km shaftproposed. Fidelity with over 12.5% is regarded as a long term holder. M&G(Vanguard) also own 10.44%. Geoff is disappointed with the volume on the LSE. I think he said only 17m shares in UK. It is certainly a very rich piece of territory with significant potential which will take many years to quantify.All very positive.

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  • 3 months later...

QUOTE (Cuthbert Calculus @ Jun 30 2009, 09:42 PM) I'm not really buying at the moment. I have my eye on Hawthorne( CA"HGC)

 

I see - & wonder if this will perk up HGC - not one I hold mind you

 

And I thought Proactive were a stock picking outfit mad.gifmad.gifmad.gifohmy.gif

 

http://www.marketwire.com/press-release/Ha...GC-1006457.html

 

Hawthorne Gold Signs Contract with Proactive Investors Limited

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 19, 2009) - Hawthorne Gold Corp. ("Hawthorne" or the "Company") (TSX VENTURE:HGC)(PINK SHEETS:HWTHF) announces it has entered into an agreement with Proactive Investors Limited ("Proactive"), to provide marketing services including shareholder communications for the Company for a period of 12 months, commencing June 15, 2009. The agreement will include banner advertising, company editorial snapshots on a quarterly basis, coverage of material news releases to the readers and subscribers to Proactive, dissemination of Proactive news coverage and articles through other newswires and news services, MP3 audio interviews and a profile of the Company on the Proactive website. Proactive will receive a fee of $8,000 for the 12 month period.

 

The agreement is subject to the acceptance of the TSX Venture Exchange. The Company and Proactive are at arm's length.

 

 

 

 

Out of interest has anyone else spotted similar from other stocks ?

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  • 1 month later...

I attended one of the London MML presentations yesterday. I know a few people are going tonight and it’s well worth hearing Geoff and Peter present imo. Here are the notes/comments I made:

 

They are very confident that Co-O will produce 3-7m oz – the mine has produced 450k oz and current resource is 1.9m oz so nearly at the lower end already. Historically, MML convert 80% of theirs resource to reserves. Co-O will qualify for a new four year tax concession from 2013 following the new mill/expansion. Anoling could contribute 50k oz pa by 2013, which is a nice little boost – this is new to me but encouraging. Geoff compared the exploration potential of the Philippines as the same as Western Australia 30 years ago so they have a lot to get on with!

 

Bananghilig – next drilling results should be in January and a resource upgrade produced around mid 2012. The BFS will follow this by end of 2012. They are confident that they will drill up 1m oz to enable them to mine 200k oz pa. The really interesting part is that they are trying to do this “under the radar” to avoid any unwanted attention from other companies. It’s possible they can mine more than 200k oz pa and the resource will grow well beyond 1m oz so it’s all about generating cashflow asap, which is a sensible strategy. $200m construction costs are similar to CGA mining’s open pit project and company believe this is achievable – estimated cash costs would be around $500/oz – so $350/oz combined with Co-O. The mine will qualify for a four year tax concession and can then be extended by a two additional years.

 

Once MML has enough cash to self fund Co-O and Bananghilig (around $250m in total) they will review the dividend policy (i.e increase it!). Likely to be early 2014 but could be earlier if gold price stays high.

 

Copper – aiming to define resources and then monetise in the future. Reiterated they are a gold company and don’t’ want to fund a $2bn copper project by raising debt and equity. Antofagasta and Vale are looking around in the Philippines so this could add real value to MML. Goldfields and Newcrest are working on gold projects.

 

They are disappointed about the low volume of shares traded on the LSE but have no plans to delist. Interestingly, I 70% of shares are held by institutions and 25% of these are London based institutions.

 

Overall, the presentation reiterated my view that there is a lot of growth to come from MML. Peter felt that the market is just valuing MML on Co-O at present, which I agree with. I get the impression that MML have been pretty cautious with their timelines for increasing production so it’s possible that they might even be able to ramp up production quicker. I thanked Geoff and Peter for doing such a good job.

 

They are presenting in London, Scotland, Amsterdam and Paris and some of these are new shareholders/potential shareholders.

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  • 1 year later...

From www.commodityshares.net

 

Medusa is an Australian company that has been focused on mining in the Philippines since 2006. It is part of the MSCI Australia 200 index as well as having a secondary full listing on the London stock exchange. The company has grown rapidly over the past five years and in the Financial Year to June 2011 produced 101,474 of gold at a cash cost of $189/oz and 60,595 oz at a cash cost of $261/oz in FY 2012. Management are forecasting 100,000 to 120,000 oz for the current FY at a cash cost of around $210/oz.

Medusa stands out from its peers due to its low cost of production, strong balance sheet, stable country of production and exploration potential. The company's corporate strategy is to become a mid-tier, 400,000 ounce per year, low-cost gold producer by 2015/16.

MML operates the Co-O narrow vein underground gold mine. At the end of 2010 they announced that they would be expanding the mine to produce around 200,000 oz pa from mid 2013. For the last year the mine has been running in “development” mode which partly accounts for the production fall in the last year. MML has also witnessed two natural events: a typhoon last December closed the road between the Co-O mine and mill, and an earthquake in February caused four leach tanks to tilt (these have since been replaced). The exceptional rain, described locally as a once in a lifetime event, did not affect the mine, but did impact production as a result.

The development of Co-O is going well and the Chairman’s address at the recent AGM confirmed that the key Saga shaft is now in the final stages of construction and due for commissioning before the end of 2012. The Chairman has referred to this as a “game-changer” which is strong language from someone so reserved. Construction of a large new leach tank has been completed and commissioned and the foundations for the SAG mill, crusher and detoxification plant are now complete. The major equipment items are also on site.

MML now has a resource base of over 3m oz for the first time. 2m of these ounces are from Co-O (at an average grade of 10.1 g/t) and management are aiming to increase this to 2.5m oz, which will provide an on-going mine life of approximately 10 years based on an 80% conversion factor from resources to reserves through continuing development. The company strategy is to replenish at a minimum, the 200,000 oz of annual production. Being a narrow vein miner, MML will never have a huge reserve and this currently stands at 568,000 oz but management have issued a conceptual exploration target of 3-7m oz based on certain strike lengths, depth and aggregate vein widths. What is clear is that the mine is open at depth and should be producing for many years. In my view the Co-O mine stands out from others in an industry that is suffering from declining grades and rising costs. The geology is similar to the Diwalwal mine that is about 60km’s away and has produced around 10m oz.

MML’s second project is the Bananghilig open pit deposit, which has 1.1m oz of gold at an average grade of 1.63 g/t. They continue to drill the property and intersections have been very encouraging to date. MML aims to have a 1m oz reserve for an initial 5 year mine life, before producing a feasibility study in 2013. At this stage, management estimate Capex will be around $200m, which will be 100% self funded from Co-O’s cashflow so there will be no debt or equity issued. Bananghilig is set to enter production in mid 2015 and this is forecast to double production in the 2016 FY to 400,000 oz. Management believe the deposit will be far larger than 1m oz and this is just a starter to get the deposit into production and generating cashflow as soon as possible.

Last year MML spent $37m on exploration, which was more than justified by the increased resource base. The budget for this year is $30m and there should be positive exploration news from both Co-O and Bananghilig. In addition, MML has 7 early stage copper projects and are hoping to prove up a resource at their Linging deposit, which they will look to monetise by selling on to a specialist copper miner. The company has said that some of the proceeds will be distributed to shareholders.

One slight cautionary note is the government review of the Phillipines mining industry was completed in July this year and guidelines for future changes to its operation issued by the President of the Philippines in Executive Order number 079. This will not have an immediate effect on Co-O but the company have cautioned that, under current guidelines, timely receipt of the permits Bananghilig will require the government to pass new tax measures aimed at increasing its revenue before construction permits can be issued. However, the company should have the approvals by the end of 2013, although it is possible that royalty payments could increase from 3% to 5% adding $50/oz to costs but would be offset by a new four year tax holiday. Despite this, the Philippines government is keen to revitalise mining and foreign investment is increasing with several projects having come into production.

As at end of June, Medusa had $51.3m of cash and gold on account and is debt free. Given the temporary production fall this is a healthy cash position. MML pay a dividend and although the final dividend was cut in the 2012 FY, the interim dividend is likely to be maintained, as production set is to increase. The board have indicated that they will review the dividend policy in 2014 once they have sufficient cash for Bananghilig.

Conclusion:

MML has strong growth prospects and is highly profitable, which explains why the current market capitalisation is around A$1bn. The top 20 shareholders account for around 64% of the company and 70% is owned by institutions. Based on 200,000 oz pa, cash costs of $200 and a gold price of $1700, MML will conservatively be generating profits of $200m in 2014. Analyst consensus forecasts are for eps of $0.72c to June 2013 and $1.16 to June 2014, which puts the shares on undemanding multiples of 8x and 5x. This is a significant discount to larger peers. As the sentiment towards the gold sector in general improves and the company starts moving towards their 200,000 oz pa, I would expect the shares to re-rate. In addition, as the second mine comes into fruition this could see a further re-rating as analysts start to factor this into their share price targets and the company is de-risked. The share price has been consolidating for the last 12 months and now is an attractive buying opportunity for those with a medium to long term time horizon. A PE of 12, which is not unreasonable for a growth stock, would give a share price of $14 – or a capital return of 140% from the current level. Having met management several times, I am confident they will deliver.

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