Disclosure: Monument Mining Limited has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions.
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Price Performance (1-year)
Portfolio Summary
Owns a producing gold mine in Malaysia, and exploration projects in Western Australia. Total compliant resources of over 1.2 Moz Au
MMY has been processing sulphide materials since December 2022, with cumulative production exceeding 55 Koz by December 2024
Q2 production was up 26% YoY, and 7% QoQ, beating our estimate by 4%, driven by higher grades and recoveries
While grade volatility is normal for miners, recoveries improved due to plant enhancements, and optimization
H1 production rose 19% YoY, driven by higher grades and recoveries
Q2 cash costs rose 3% YoY, and 10% QoQ, to $918/oz, exceeding our $875/oz estimate, due to higher royalties from increased gold prices
Despite higher cash costs, gross profit was up 67% YoY, and 4% QoQ, to $1,760/oz
With over 700 Koz of sulfide resources remaining, we believe the mine could produce up to 14 more years, with annual production expected to rise to 40 Koz from the previous five-year average of 12.5 Koz
Financials (Year-End: June 30th)
Q2 revenue was up 2% QoQ, and 80% YoY, beating our estimate by 13%, driven by higher production and gold prices
Gross and EBITDA margins declined QoQ due to higher cash costs, but increased significantly YoY
Although EBITDA was relatively flat QoQ, EPS improved due to FOREX gains from a stronger US$, exceeding our forecast by 42%
EBITDA was up 160% YoY, with EPS turning positive, exceeding our forecast by 42
Strong balance sheet, with $32M in working capital, and no debt
FRC Projections and Valuation
We are raising our EPS estimates due to higher gold prices, and stronger-than-expected Q2 production. Sector multiples are down 7% since our previous report in December 2024
MMY is trading at a 73% discount (previously 77%) to comparable junior gold miners. Applying sector multiples, we arrived at a fair value estimate of C$0.53/share (previously C$0.45/share) on the Selinsing mine
Valuation increased due to our higher revenue/EBITDA forecasts, partially offset by lower sector multiples
We are reiterating our BUY rating, and adjusting our fair value estimate from C$0.59 to C$0.68/share. MMY delivered another solid quarter of operational performance in Q2, primarily driven by higher grades and recoveries. While the stock has seen significant gains over the past 12 months, its valuation remains attractive compared to peers.
Risks
We believe the company is exposed to the following key risks:
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