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8/6/2019 Byron Capital Markets March 3 2011
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Please see end of this report for important disclosures
Equity Research
March 3, 2011
Rating: BUY Monument Mining LimitedTarget Price: C$1.15 (MMY-TSXV)
All figures in C$, unless otherwise noted Projected Gold Production and Plant Expansion
Plan Better than Market Expectation
XMill Capacity Will Increase 250% in One Year: Monument Miningreleased its Phase III expansion plan for its 100%-owned Selinsing
Gold Mine. The company plans to raise the mill capacity 250% to1 million tonnes/year from 400,000 tonnes/year by April 2012 with
a budgeted capex of $8 million. The designed capacity is 25%
higher than market expectation, but the budgeted capex is in line
with our expectation.
XProjected Gold Production in Fiscal 2012 Beats MarketExpectation: According to the companys released news, the
projected gold production in fiscal 2012 will be no less than 50,000
ounces, over 25% higher than market expectation (40,000 ounces),
due to increased processing capacity. Therefore, we have raised
our projected gold production in fiscal 2012 to 50,000 ounces from
40,000 ounces.
XThe Company Plans to Further Accelerate Its ExplorationActivities: Currently only two drilling rigs, one diamond rig and one
RC rig, are operated by MMYs exploration team at Selinsing,
Damar Buffalo Reef and Famehub. The company plans to use four
in-house rigs and one contract diamond drill rig for its future
exploration and speed up its drilling activity significantly.
XFuture Exploration Success Will Enhance MMYs Long-term ValueAny future exploration success at Selinsing, Damar Buffalo Reef or
Famehub will extend the LOM of Selinsing Gold Mine and enhance
the companys intrinsic value. At the current stage, we have notincluded any potential future exploration success into our
forecasting model.
XRecommendation: Due to our updated assumption on goldproduction in fiscal 2012 at Selinsing, we are raising our price
target to $1.15 from $1.10 per share and reiterating our BUY
recommendation.
Recent Price: $0.66
52 Week Range: $0.24-$0.74
Shares O/S basic (MM): 173.3
f.d. (MM): 319.3
Market Cap (MM): $114.4
Net Cash (Estimated) (MM): $25.0
Enterprise Value (MM): $89.4
Fiscal Year End: Jun. 30
Financials 2011E 2012E
Production (Oz 000s) 38 50
Revenue (US$MM) $50 $72
Cash Flow/Share $0.10 $0.15
Price/Cash Flow 6.8 4.4
Commodities 2011E 2012E
Gold (avg. in US$/oz) $1,425 $1,425
Company Description: Monument Mining Ltd.,
together with its subsidiaries, engages in the
exploration, development and production of
gold mineral properties in Malaysia. It owns
100% interests in the Selinsing Gold Mine and
the Damar Buffalo Reef exploration prospect. It
recently acquired a 100% interest in the
Famehub exploration prospect located to the
north of Buffalo Reef and east of the Selinsing
gold mine.
Jeff Wu, CFA
Mining Analyst
604-697-2455
8/6/2019 Byron Capital Markets March 3 2011
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Monument Mining Limited
Jeff Wu, CFA 604-697-2455 [email protected] P a g e | 2
Exhibit 1: Financial Forecasting for Monument Mining
Source: Monument Mining Limited, Byron Capital Markets Ltd.
(US$ 000's) 2011E 2012E 2013E 2014E 2015E 2016E 2017E
Fiscal Year End 30-Jun-11 30-Jun-12 30-Jun-13 30-Jun-14 30-Jun-15 30-Jun-16 30-Jun-17
Revenue 49,587 71,787 99,013 93,345 77,010 44,080 41,487
Operating Costs
Mining Costs 3,092 4,004 6,219 6,595 6,595 6,595 6,595
Milling Costs 3,837 4,942 7,674 8,140 8,140 8,140 8,140
Leaching Costs 1,590 2,703 4,198 4,452 4,452 4,452 4,452
8,519 11,649 18,091 19,187 19,187 19,187 19,187
Operating Margin 41,068 60,138 80,922 74,158 57,823 24,893 22,300
General & Admin Costs 2,500 2,500 3,000 3,000 3,000 3,000 3,000
Royalty 2,479 3,589 4,951 4,667 3,850 2,204 2,074
EBITDA 36,088 54,048 72,971 66,491 50,972 19,689 17,225
Interest Payment -100 -200 -500 -700 -900 -1,000 -1,100
Exploration Expense 2,000 2,000 1,000 1,000 0 0 0Depreciation 1,820 2,976 5,081 5,231 5,431 5,731 6,331
Taxable Income 32,368 49,273 67,391 60,960 46,442 14,958 11,995
Taxes Payable 0 0 0 0 0 4,487 3,598
Net Income 32,368 49,273 67,391 60,960 46,442 10,471 8,396
EPS ($ Fully diluted) 0.10 0.15 0.21 0.19 0.15 0.03 0.03
EPS (C$ Fully diluted) 0.10 0.16 0.23 0.21 0.16 0.04 0.03
Operating Cash Flow (OCF) 30,888 45,948 70,871 65,591 51,272 15,601 14,127
OCF/Share ($ FD) 0.10 0.14 0.22 0.21 0.16 0.05 0.04
OCF/Share (C$ FD) 0.10 0.15 0.24 0.23 0.18 0.05 0.05
Price/OCF 6.8 4.4 2.7 2.9 3.7 12.2 13.4Gold Ounces Produced (000's) 38 50 73 78 70 44 41
8/6/2019 Byron Capital Markets March 3 2011
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Monument Mining Limited
Jeff Wu, CFA 604-697-2455 [email protected] P a g e | 3
IMPORTANT DISCLOSURES
Analyst's Certification
All of the views expressed in this report accurately reflect the personal views of the responsible analyst(s) about any and all of the
subject securities or issuers. No part of the compensation of the responsible analyst(s) named herein is, or will be, directly or indirectly,
related to the specific recommendations or views expressed by the responsible analyst(s) in this report. The particulars contained herein
were obtained from sources which we believe to be reliable but are not guaranteed by us and may be incomplete.
Byron Capital Markets Ltd. (Byron) is a Member of IIROC and CIPF. Byron compensates its research analysts from a variety of sources.
The research department is a cost centre and is funded by the business activities of Byron including institutional equity sales and trading,
retail sales and investment banking. Since the revenues from these businesses vary, the funds for research compensation vary. No one
business line has greater influence than any other for research analyst compensation.
Dissemination of Research
Byron endeavors to make all reasonable efforts to provide research simultaneously to all eligible clients. Byron equity research is
distributed electronically via email and is posted on our proprietary website to ensure eligible clients receive coverage initiations and
ratings changes, targets and opinions in a timely manner. Additional distribution may be done by the sales personnel via email, fax or
regular mail. Clients may also receive our research via a third party.
Company Specific Disclosures:
1. The research analyst(s) and/or associate(s) who prepared this research report have viewed the material operations ofMonument Mining Limited.
2. Byron has been paid or reimbursed by the issuer for the analyst(s) travel expenses to view the material operations ofMonument Mining Limited.
3. Byron has received compensation for investment banking and advisory services from Monument Mining Limited during thepreceding 12 months.
Investment Rating Criteria
STRONG BUY
BUY
The security represents extremely compelling value and is expected to appreciate significantly from the
current price over the next 12-18 month time horizon.
The security represents attractive value and is expected to appreciate significantly from the current
price over the next 12-18 month time horizon.
SPECULATIVE BUY The security is considered a BUY but in the analysts opinion possesses certain operational and/or
financial risks that may be higher than average.
HOLD The security represents fair value and no material appreciation is expected over the next 12-18 month
time horizon.
SELL The security represents poor value and is expected to depreciate over the next 12-18 month time
horizon.
Other Disclosures
This report has been approved by Byron for distribution in Canada for the use of Byrons clients. Clients wishing to effect transactions in
any security discussed should do so through a qualified Byron salesperson, registered in their jurisdiction.
Informational Reports
From time to time, Byron will issue reports that are for information purposes only, and will not include investment ratings. These reports
will be clearly labeled as appropriate.