Equity Research

March 3, 2011

Rating: BUY Monument Mining Limited

Target Price: C$1.15↑ (MMY-TSXV)
All figures in C$, unless otherwise noted Projected Gold Production and Plant Expansion
Plan Better than Market Expectation
X Mill Capacity Will Increase 250% in One Year: Monument Mining
Recent Price: $0.66
released its Phase III expansion plan for its 100%-owned Selinsing
52 Week Range: $0.24-$0.74
Shares O/S basic (MM): 173.3 Gold Mine. The company plans to raise the mill capacity 250% to
f.d. (MM): 319.3 1 million tonnes/year from 400,000 tonnes/year by April 2012 with
Market Cap (MM): $114.4 a budgeted capex of $8 million. The designed capacity is 25%
Net Cash (Estimated) (MM): $25.0 higher than market expectation, but the budgeted capex is in line
Enterprise Value (MM): $89.4
Fiscal Year End: Jun. 30
with our expectation.
Financials 2011E 2012E X Projected Gold Production in Fiscal 2012 Beats Market
Production (Oz 000’s) 38 50 Expectation: According to the company’s released news, the
Revenue (US$MM) $50 $72
Cash Flow/Share $0.10 $0.15
projected gold production in fiscal 2012 will be no less than 50,000
Price/Cash Flow 6.8 4.4 ounces, over 25% higher than market expectation (40,000 ounces),
Commodities 2011E 2012E due to increased processing capacity. Therefore, we have raised
Gold (avg. in US$/oz) $1,425 $1,425 our projected gold production in fiscal 2012 to 50,000 ounces from
Company Description: Monument Mining Ltd., 40,000 ounces.
together with its subsidiaries, engages in the
exploration, development and production of
X The Company Plans to Further Accelerate Its Exploration
gold mineral properties in Malaysia. It owns Activities: Currently only two drilling rigs, one diamond rig and one
100% interests in the Selinsing Gold Mine and RC rig, are operated by MMY’s exploration team at Selinsing,
the Damar Buffalo Reef exploration prospect. It Damar Buffalo Reef and Famehub. The company plans to use four
recently acquired a 100% interest in the
in-house rigs and one contract diamond drill rig for its future
Famehub exploration prospect located to the
north of Buffalo Reef and east of the Selinsing exploration and speed up its drilling activity significantly.
gold mine.
X Future Exploration Success Will Enhance MMY’s Long-term Value:
Any future exploration success at Selinsing, Damar Buffalo Reef or
Famehub will extend the LOM of Selinsing Gold Mine and enhance
the company’s intrinsic value. At the current stage, we have not
included any potential future exploration success into our
forecasting model.
X Recommendation: Due to our updated assumption on gold
production in fiscal 2012 at Selinsing, we are raising our price
Jeff Wu, CFA
target to $1.15 from $1.10 per share and reiterating our BUY
Mining Analyst recommendation.
604-697-2455
jwu@byroncapitalmarkets.com
Please see end of this report for important disclosures
 Monument Mining Limited

Exhibit 1: Financial Forecasting for Monument Mining

(US$ 000's) 2011E 2012E 2013E 2014E 2015E 2016E 2017E
Fiscal Year End 30-Jun-11 30-Jun-12 30-Jun-13 30-Jun-14 30-Jun-15 30-Jun-16 30-Jun-17
Revenue 49,587 71,787 99,013 93,345 77,010 44,080 41,487
Operating Costs
Mining Costs 3,092 4,004 6,219 6,595 6,595 6,595 6,595
Milling Costs 3,837 4,942 7,674 8,140 8,140 8,140 8,140
Leaching Costs 1,590 2,703 4,198 4,452 4,452 4,452 4,452
8,519 11,649 18,091 19,187 19,187 19,187 19,187
Operating Margin 41,068 60,138 80,922 74,158 57,823 24,893 22,300
General & Admin Costs 2,500 2,500 3,000 3,000 3,000 3,000 3,000
Royalty 2,479 3,589 4,951 4,667 3,850 2,204 2,074
EBITDA 36,088 54,048 72,971 66,491 50,972 19,689 17,225
Interest Payment -100 -200 -500 -700 -900 -1,000 -1,100
Exploration Expense 2,000 2,000 1,000 1,000 0 0 0
Depreciation 1,820 2,976 5,081 5,231 5,431 5,731 6,331
Taxable Income 32,368 49,273 67,391 60,960 46,442 14,958 11,995
Taxes Payable 0 0 0 0 0 4,487 3,598
Net Income 32,368 49,273 67,391 60,960 46,442 10,471 8,396
EPS ($ Fully diluted) 0.10 0.15 0.21 0.19 0.15 0.03 0.03
EPS (C$ Fully diluted) 0.10 0.16 0.23 0.21 0.16 0.04 0.03
Operating Cash Flow (OCF) 30,888 45,948 70,871 65,591 51,272 15,601 14,127
OCF/Share ($ FD) 0.10 0.14 0.22 0.21 0.16 0.05 0.04
OCF/Share (C$ FD) 0.10 0.15 0.24 0.23 0.18 0.05 0.05
Price/OCF 6.8 4.4 2.7 2.9 3.7 12.2 13.4
Gold Ounces Produced (000's) 38 50 73 78 70 44 41
Source: Monument Mining Limited, Byron Capital Markets Ltd.

Jeff Wu, CFA ƒ 604-697-2455 ƒ jwu@byroncapitalmarkets.com P a g e |2

 Monument Mining Limited

IMPORTANT DISCLOSURES

Analyst's Certification

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Company Specific Disclosures:

1. The research analyst(s) and/or associate(s) who prepared this research report have viewed the material operations of
Monument Mining Limited.
2. Byron has been paid or reimbursed by the issuer for the analyst(s) travel expenses to view the material operations of
Monument Mining Limited.
3. Byron has received compensation for investment banking and advisory services from Monument Mining Limited during the
preceding 12 months.

Investment Rating Criteria

STRONG BUY The security represents extremely compelling value and is expected to appreciate significantly from the
current price over the next 12-18 month time horizon.

BUY The security represents attractive value and is expected to appreciate significantly from the current
price over the next 12-18 month time horizon.

SPECULATIVE BUY The security is considered a BUY but in the analyst’s opinion possesses certain operational and/or
financial risks that may be higher than average.

HOLD The security represents fair value and no material appreciation is expected over the next 12-18 month
time horizon.

SELL The security represents poor value and is expected to depreciate over the next 12-18 month time
horizon.

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Jeff Wu, CFA ƒ 604-697-2455 ƒ jwu@byroncapitalmarkets.com P a g e |3