Reporting Season: Millennium reaffirms gold production guidance

By Trevor Hoey. Published at Aug 7, 2018, in Features

Name: Millennium Minerals Ltd (ASX:MOY)

Market Capitalisation: $150 million

Intraday Share Price (August 6, 2018): 19 cents

Presenting on the first day of the Diggers and Dealers Mining Forum in Kalgoorlie, Millennium Minerals reassured investors that it was on track to deliver on calendar year 2018 production guidance in a range between 75,000 ounces and 80,000 ounces.

After falling short of production guidance and analyst’s expectations in the first half of calendar year 2018, Millennium expects to produce at least 45,000 ounces of gold in the December half.

This is a speculative figure at this stage and investors should seek professional financial advice if considering this stock for their portfolio.

Management is forecasting all in sustaining costs (AISC) to be in a range between $1280 per ounce and $1350 per ounce.

With the Australian dollar gold price hovering in the vicinity of $1640 per ounce that implies a margin of circa $320 per ounce.

Hartleys sees Millennium as a 2019 story

However, the company is really a 2019 story according to Hartleys’ resource analyst Mike Millikan.

He is forecasting annual production to increase to just over 100,000 ounces in that year with AISC coming back to $1274 per ounce.

Based on his gold price and currency assumptions for 2019, Millikan is forecasting that Millennium will generate a normalised net profit of $23.6 million, representing earnings per share of 2.3 cents.

Importantly though, with much of the capital expenditure behind it, he expects the company to increase cash flow per share by more than 50 per cent in 2019 to 5.8 cents per share.

Millikan has an accumulate recommendation on the stock with a price target of 25 cents per share.

It should be noted that broker projections and price targets are only estimates and may not be met. Those considering this stock should seek independent financial advice.

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

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The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.

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