Medusa Mining Ltd

MML Details
· Weak production estimates hurting the stock sentiment: Medusa Mining Limited (ASX: MML) stock fell over 8.5% on January 12, 2017. MML decreased their production guidance for FY17 to the range of 85,000 to 95,000 ounces of gold at All-In-Sustaining-Costs (AISC) of US$1,250 to US$1,350 per ounce as compared to their earlier estimates of 105,000 to 115,000 ounces of gold at AISC of US$1,000 to US$1,100 per ounce. The group expects over 17,000 ounces for the December 2016 quarter as compared to 21,157 ounces of gold at AISC of US$1,334 per ounce for the September 2016 quarter.

· Recommendation: MML does not expect their overall grade on December quarter to be like September quarter. Moreover, the overall mine production output has not been as planned, impacted by higher mine-shaft maintenance requirements, due to the wear rate of the L8 Shaft guides. MML stock slipped 32% in the last six months (as of January 11, 2017). We give an “Expensive” recommendation at the current price of – $ 0.48

Western Areas Ltd

WSA Details 
· Positive exploration highlights: Western Areas Ltd (ASX: WSA) stock fell over 3.25% on January 12, 2017. The group has a 25% stake in E29/638 at Mt Alexander Project joint venture with St George. In December 2016, more EM anomalies were reported at Cathedrals Belt by the fixed loop electromagnetic (FLEM) SAMSON survey. These new EM anomalies comprised deeper targets as compared to the earlier anomalies explored by St George. Infill EM surveys are finished over several new EM anomalies to finalize modelling of the targets. The drill program has been planned for first quarter of 2017 to test for massive nickel?copper sulphide mineralization at priority EM targets.

·         Recommendation: WSA stock surged over 28.4% in the last three months (as of January 11, 2017). Given the prospects, we give a “Buy” on the stock at the current price of - $ 3.28

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