I have been studying MTO for several weeks. I am not a geologist, an accountant, or an engineer. I know a few basic things about a few basic things.
Is there something I am missing with this company? I see a producing gold mine with a working mill and dirt to feed the mill. The all in cost to produce an ounce of gold is just under $1,200 CDN. Gold is $1533 CDN today.
There is a lot to running a mine but it is basically a simple business. Run the ore through the mill. You don't need a sales department to move this stuff, it sells itself because everybody wants it. At today's prices the company nets a million dollars a month. If gold goes to $2,000 CDN MTO banks almost 3 million a month. With a little more production and a little better grade of ore that goes up another half a mill a month.
So how is this not a good deal? You can buy the company for $19.32 million and it literally digs a million a month out of the ground. What am I missing? Is there some long term commitment I can't see in the financial reports? Don't play the "management is stupid and they suck" card. Management has created a million a month in free cash flow. I'm no expert, maybe they could have done better, but they haven't done too badly.
So, help me out. Are they going bankrupt? With all that cash flow? How?
For six and a half cents a share, isn't this a tremendous bargain?