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Price Performance (1-year)
*See important disclosures at the bottom of this report rating and risk definitions. All figures in C$ unless otherwise specified.
Owns a producing gold mine in Malaysia, and exploration projects in Western Australia. Total compliant resources of over 1.2 Moz Au
Selinsing Gold Project
MMY owns and operates the Selinsing gold mine in Pahang State, Malaysia. The project encompasses the Selinsing, Buffalo Reef, Felda Land, Peranggih, and Famehub properties, covering 150 km2.
Located 158 km north of Kuala Lumpur. An open-pit gold mine + a 950 ktpa (thousand tonnes per annum) sulfide processing plant
Commercial production began in 2010, with 363+ Koz of gold produced to date
From 2010 to 2022, MMY mined oxide and transitional materials. Since December 2022, MMY has been processing sulphide materials, producing over 26 Koz to date
From 2020 to 2022, production and grades declined, and cash costs increased due to depleting oxide/transitional materials. However, production ramped up in 2023, with the start of processing sulfide materials
In 2024 (9M), MMY produced 20 Koz, up 225% YoY. Cash costs declined YoY, from $1,536 to $878/oz
With over 700 Koz of sulfide resources remaining, we believe the mine could produce up to 14 more years, with annual production projected to rise to 40 Koz from the previous five-year average of 12.5 Koz
Grades are attractive for an open-pit mine
Sulphide resources are open at depth. Multiple unexplored regional targets
Located 765 km northeast of Perth
This project is located in the prolific Murchison goldfield in Western Australia, which has produced over 35 Moz of gold. The project encompasses the Burnakura, Gabanintha, and Tuckanarra properties, covering 230 km2.
Location Map
Lies within the Murchison goldfield, which hosts gold producers such as Westgold Resources (ASX: WGX/MCAP: $783M) and Ramelius Resources (ASX: RMS/MCAP: $1.4B)
This property hosts several deposits, and historic open-pit/underground mines.
381 Koz gold spread across five deposits
Burnakura also hosts a 260 Ktpa CIL processing plant, with an option to expand capacity to 750 Ktpa
20+ km of prospective strike length. Resources remain open at depth
This property has six historical pits with near-surface high-grade gold mineralization.
Gabanintha Open-Pits
Hosts a historical resource of 153 Koz gold, which is open at depth. Exploration has identified 30 regional targets
In February 2024, JV partner Odyssey Gold (ASX: ODY/MCAP: $9M), announced a resource estimate of 407 Koz gold (2.45 gpt) for Tuckanarra. MMY owns a 20% free-carried interest up to a production decision
Due to the depletion of oxide materials, revenue, margins, and EPS experienced annual declines from 2020 to 2022
However, in 2024 (9M), driven by the start of processing sulfide materials, revenue surged by 256% YoY, with improved margins, and both net income and free cash flows turned positive
Strong balance sheet, with $23M in working capital, and no debt
We anticipate record revenue and EPS in FY2024 and FY2025
MMY is trading at an 86% discount to junior gold producers
Applying sector multiples, we arrived at a fair value estimate of C$0.36/share for the Selinsing mine
Our DCF valuation of Selinsing is C$0.37/share, based on a 12-year mine-life, using 100% of M&I and 50% inferred sulphide resources
We are valuing Murchison’s resources based on the sector average multiple of C$39/oz for junior gold explorers.
Using a sum-of-parts valuation model, we arrived at a fair value estimate of C$0.51/share
We are resuming coverage with a BUY rating, and a fair value estimate of C$0.51/share. We are more bullish on gold stocks than the metal itself, with gold producer valuations averaging 21% lower compared to the past three instances when gold surpassed $2k/oz.
Assigning a risk rating of 4 (Speculative)
The following risks, though not exhaustive, will cause our estimates to differ from actual results:
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