Report Highlights
- MMY is up 103% YoY, significantly outperforming gold (up 35%), and the VanEck Junior Gold Miners ETF (up 42%), yet remains deeply undervalued at 1.0x forward EBITDA, compared to the sector average of 5.4x, an 83% discount.
- In Q2-FY2025 (ended December 2024), MMY produced 8.6 Koz from its 100% owned Selinsing gold mine in Malaysia, up 26% YoY, beating our estimate by 4%. Production growth came from higher grades and recoveries. While grade volatility is normal for miners, recoveries improved due to plant enhancements and optimization. As a result, we believe recoveries will likely exceed those of previous quarters going forward.
- Gross profit was up 67% YoY, and 4% QoQ, to $1,760/oz. Revenue was up 2% QoQ, and 80% YoY, beating our estimate by 13%, driven by higher production and gold prices. Although EBITDA was relatively flat QoQ, EPS improved due to FOREX gains from a stronger US$, exceeding our forecast by 42%.
- As of December 2024, MMY had $32M in working capital, with no debt.
- The company is planning a resource upgrade drill program this year aimed at potentially converting inferred to M&I resources. MMY has not engaged in exploration at its Murchison gold project in Australia lately, but management intends to start with historical resource confirmation drilling, and regional geological analysis.
- With gold trading near record highs, we anticipate an increase in M&A activity over the next 12 months, as larger companies target juniors to grow their portfolios.
- We are raising our EPS estimates due to higher gold prices, and stronger-than-expected Q2 production.
*This report and research coverage is paid for and commissioned by Monument Mining Limited – See the bottom of this report for other important disclosures rating, and risk definitions. All figures in C$ unless otherwise specified.
