Sign up UNITED KINGDOM
Proactive Investors - Run By Investors For Investors

Medusa Mining's self funded expansion largely missed by market, reckons SP Angel

Buy on weakness is the advice of natural resources boutique SP Angel when assessing the potential of Medusa Mining, which has suffered along with the rest of the sector.
Medusa Mining's self funded expansion largely missed by market, reckons SP Angel

Buy on weakness is the advice of natural resources boutique SP Angel when assessing the potential of Medusa Mining (LON:MML), which has suffered along with the rest of the sector.

A target price of 450 pence suggests there is significant blue sky for investors who take the plunge now at around 133 pence.

SP Angel’s veteran analyst John Meyer reckons the company’s self-funded expansion, which will take output to 200,000 ounces of gold, has largely gone unnoticed by the market.

Rather, the stock has been dogged by concerns the company may not be able to meet capital requirements to complete the expansion at the Co-O mine in the Philippines. Meyer said these fears are “unfounded”. 

“For next year the target is for a significant uplift to 200,000 ounces,” he explained in a note to clients.

“Even if the ramp up to achieve this is slower than expected the company should deliver significant value to shareholders with high free cash flow yields well above ten per cent even with low gold price assumptions and any production shortfall.”

The analyst pointed out Medusa enjoys a low cash cost of $400 an ounce and this puts the group in an “enviable position” relative to the rest of the sector.

Certainly, Medusa’s attractions are becoming apparent to the savvy investors, with Blackrock recently revealed as the 5.05% shareholder. 

Meyer concludes: “The recent weakness in the share price provides a good entry point.”

View full MML profile View Profile

Medusa Mining Timeline

Newswire
March 02 2018

Related Articles

1521549964_gold_bars,_sized.png
March 20 2018
Renaissance Gold has an extensive exploration portfolio in Nevada and Utah, and an impressive array of partners
 Björkdal is a standout but miner Mandalay’s resilience underlined by this year’s production stats
January 19 2018
Mandalay is a multi-mine firm, and is not reliant on one project.
1520338767_shutterstock_130308137.jpg
March 06 2018
Viscount Mining is sitting on two highly prospective gold projects in the USA

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use