A man looks the board of the Australian Securities Exchange ASX in central Sydney August 7, 2013.
A man looks the board of the Australian Securities Exchange in central Sydney August 7, 2013. Reuters/Daniel Munoz

Investors joining the Australian gold miner Millennium Minerals’ (ASX-MOY) current capital raising program at 4c a share stand to gain immensely as the stock has the potential to increase the value three fold and triple the money, according to the depth report of a leading analyst at equity research firm Beer & Co.

Millennium is raising up to $21 million at 4c a share that is open to all investors. The prospectus and application are available at www.mmltd.com.au.

Strong basics

According to Beer and Co’s leading analyst, Pieter Bruinstroop, shares of Millennium Minerals amply reflect the company’s strong financial, operational and exploration outlook. The analyst made the forecast based on the intense exploration program outlined by the gold miner.

“Given our expected exploration success and a gold price of $1250/oz, at an AUD ‐ USD rate of US70c, Beer & Co generates a risked value of 12.5c a share," the analyst said.

Regarding production, the analyst noted that Millennium’s current production is about 90,000 ounces a year at the Nullagine project in Pilbara region. The outlook on all-in sustaining costs for the calendar year is also encouraging at $1190-1240/oz.

In an update on capital raising, MOY said it will channel some of the money raised to retire its $14 million debt to shareholder, IMC Group. It will also repay the $4.8 million bank loan in March 2016 and try to retire all debts. Millennium's market capitalisation is around $29 million.

Exploration drive

A major chunk of the raising will go into exploration program across the land holding to grow resources and mine life. Therefore, analyst Bruinstroop notes that the success of exploration program will be the key of Millennium’s future and he is sure that it will succeed massively.

“The Nullagine operations have been turned around, but there is further to go,” he said in the latest research note. Converting mineralisation into mining inventory is essential, in which Beer & Co expects MOY to out ‐ perform, the anlyst wrote.

“Millennium has visible mineralisation outside of its resources and many large intercepts of high grade and ore grade material,” Bruinstroop noted.

Turn around

Meanwhile, Millennium Minerals reported record quarterly production of 27, 238 oz from its Nullagine operation, for the quarter ended September 30.

The output soared 26 per cent higher vis a vis the June quarter and raised gold production for the nine months until September to 68, 959 oz. The sale of gold also made a record. With 28, 012 oz sold, it was higher than 21, 538 oz sold in the June quarter.

Higher sales of gold brought big revenue, that was up by 26 per cent on a quarter-on-quarter basis at $42.1 million. The revenue for the nine months, which ended in September, touched $105.8 million. Company CEO Glenn Dovaston hailed the record production of gold as the vindication of company’s turnaround strategy.

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