RE: Share Prophets4 Feb 2024 06:58
Metals Exploration (MTL) states that it “is pleased to announce its quarterly results for Q4 2023”. So what of a current 2.80p offer price for the shares in response?
This share price of this gold company in the Philippines is down from recent levels of 3p+ but still up from around 2.5p as recently as the prior month and the latest move likely partly reflects the company’s fourth quarter production enabling gold sales in the quarter of 17,514 ounces, down from a prior quarter 22,034 ounces, and “FY2024 gold production forecast: 74,000 - 80,000 ounces… AISC forecast: US$1,175 - US$1,275 per ounce” comparing to 2023 production of 85,194 ounces and such costs of $1,126 per ounce.
That is including with recent lower grades and there is also that a recent, in and near-to the current pit-shell design, exploration drill programme has made no significant gold discoveries. However, still it is “net debt as at 31 December 2023 was US$19.9 million (30 September 2023: US$30.6 million)” and there is likely still a few years life-of-mine and now also “the first steps of delivering our strategy to grow MTL within the Philippines, and ultimately the broader region, through the conditional acquisition of the Abra Tenement”.
This exploration tenement covers 16,200 hectares with multiple prospective targets in both gold and copper and we also note that the fourth quarter net debt reduction was with an average realised gold price of $1,980 per ounce and that gold has more recently been comfortably above $2,000 per ounce.
Although there remain exploration and debt settlement risks, the more than $10 million net debt reduction for even the latest quarter and the $19.9 million remaining net debt compare to a market cap, at 2.8p per share, of £58.7 million, currently approx. $75 million. This is a winning tip but there looks more to come as we continue to consider that a 4p+ near-term share price is quite possible here and that the shares are therefore currently still a Buy.