Mako Mining Corp V.MKO

This board

[AkibaLeisman]

In 2019 we changed management and the objectives of the company.   Instead of faking a way to develop a mine that would have failed, we focused on getting the technical data right (geology and engineering) and 1) build a 500 tpd mine, 2) expand to a 1000 tpd mine, and 3) prove that this is an orogenic camp, and do it in the context of 5 years.

Under excruciatingly difficult circumstances, we were able to deliver that first objective, and are well advanced on our 2nd and 3rd objectives.

This is how we measure ourselves.

I am very sympathetic to investors who were in Golden Reign prior to 2019, but if you were invested in that company after the original Sailfish stream came in, you were invested in a company with flawed technial data (i've spoken about that ad nauseum), and with an encumberance that would have rendered the mine uneconomic.  We have now reported 2 quarters of operating results and 1 quarter of financial results to show that that IS A FACT.

Everything changed in 2019.  Firstly, the cap structure changed dramatically with the .10 rights offering that expanded the share count by ~80%.  But it wasn't just that.  Not only was the stream restructured (in 2018), but I was able to get our team in control of the operations and afford our exploration team (who were mostly from Golden Reign and excellent, BTW) all of the leeway they needed to get the technical aspects of the business in order.  This did not exist with the previous management team.

As I mentioned on the webinar, the only thing that matters is the stock price.  We don't believe in technical successes.  But this is in relation to our 5 year plan.  STARTING IN 2019!  Whatever invesmtent you made prior to that is irrelevant, as that company doesn't exist anymore.   in terms of short term stock price movements and drawdowns, I don't particularly care what happens on any given trading day.  Up until a few days ago, I didn't think our stock was particularly weak vs. the industry.  That probably changed a bit on Thursday, so our antennae are up wrt the NCIB now (although we will be information restricted for the next few days until our next PR comes out).

I do spend a good portion of my day talking to the sell side and investors (and not just on Twitter).  It's not like we are treating this as a private compnay.  But this is a divergent investment theme from the traditional gold mining company, and therefore it is always a difficult task to bring in new investors, especially in a bear market.  But this will change over time, as the business plan was intended to make us look more "convergent" to what is considered a normal mining business after the execution of our plan is complete.

So if you are concerned about this stock, it's not worth the mental aggravation to keep your position.  If you're concerned about the execution, you should reevaluate.  If you are concerned about me and Wexford, they aren't going anywhere.  ALL OF THIS should have been known in 2019, if not 2018 (when Mako was created) or even 2014 when that first Marlin/Sailfish investment was made.

But the truth of the matter is that execution has been excellent, the mangement of the business has been VASTLY improved, and the position that Mako is in has truly never been stronger.

So we will keep executing on our plan.  But dudes, let's come back to reality here. 

Cheers,
Akiba

[barrywhit]

Akiba, Thanks for your post, lets see what happens in the next 12 months. Lets hope Bidens Sanctions don't throw a spanner in the works...

[AkibaLeisman]

Geopolitics is a risk.  I put Nicaragua as my top risk on my pinned Twitter thread from 2019.  That being said, Nicaragua has been an amazingly good place to permit, build and operate a mine. 

[nkbourbaki]

Akiba - I'd appreciate some colour here.  The quoted text suggests that your decision to trigger the NCIB depends on the relative valuation of MKO vs peers, whereas I would expect the price trigger to be based entirely on your internal estimate of intrinsic value.    Considering relative valuation makes a lot of sense for short term trading but I don't understand its

[AkibaLeisman]

Our first priority is ALWAYS to fund the business plan.  I can't even envision a situation where we would reallocate funds from the business to the NCIB.   Beyond that, as long as we have debt, the NCIB is a relative choice between debt repayment and buybacks, which is directly related to the price of our equity (both in absolute terms vs our intrinsic value and relative to our

[nkbourbaki]

Thanks for the response. Yes, I understand that the business plan is the priority. You've been clear about that and I'm all aboard.  But I'm still confused as to why the valuation of MKO relative to your comps has any impact on the NCIB.   From your response I think the reason must seem obvious to you. I'm not saying you're wrong, I just don't get it.  &

[AkibaLeisman]

Fair question.  My view of value is based on what I think the business is worth.  And what I think the business is worth is correlated to what the market thinks my direct competitors are worth.   I have a view about what we should be worth in a vacuum, but what comps trade at do influence the decision.  Btw: none of this is scientific.  There's a cottage industry

[Philbert77]

Akiba - as a current shareholder I would love to see you pay down the debt fully. Buybacks and dividends can wait. Thanks for the hard work and engaging shareholders in all the mediums! 

[Method]

  I also like paying off the debt fully but buying a million shares at 30 cents would only use a fraction of free cash flow. It would be nice to have a bid out there at least.

[AkibaLeisman]

That's a good point.  A few hundred thousand to a million shares of overhang can influence the stock price a lot even though it's not a big $ number.  If I had perfect visibility on what the overhang was (and I don't), tactically cleaning it up would be a good idea.  

[AkibaLeisman]

That's definitely the priority.  We're actually making another principal payment today.   in the last 3 months, it was really only for a couple of days the week before last that price was indicating we should have used the NCIB, but we couldn't do anything until those drill results were out.   btw: there's nothing wrong with debt per se, it's the cost of