www.medusamining.com.au
Medusa Mining, a public company listed on the ASX and LSE, is an Australian based gold producer, focused solely on the Philippines. Medusa's corporate strategy is to become a mid-tier, 400,000 ounce per year, low-cost gold producer.
The Company has completed the two-phase expansion of its high grade Co-O Mine operations to a production level of 100,000 annualised ounces. The Company has approved a Phase 3 expansion to build an expanded mill with capacity for 200,000 ounces of production.
Ongoing drilling is verifying and expanding the Bananghilig Deposit with the aim of defining one million ounces of reserves to initiate feasibility studies.
Further potential upside exists for the discovery of copper and additional gold deposits within the tenement holding of more than 800km2.
Medusa Mining’s Hepburn-Brown eyes further growth following 2011’s record results
As low-cost gold producer Medusa Mining (LON:MML, ASX:MLL, TSE:MLL) unveiled impressive full year earnings of US$120 million, up 64 per cent from last year, the group’s new managing director Peter Hepburn-Brown was firmly focussed on bigger and better things.
This morning’s full year results, for the twelve months ended 30 June 2011, are the first since the company began producing at a rate of 100,000 ounces a year from the Co-O gold mine in the Philippines.
The results themselves are very positive particularly given the soaring price of gold at the moment.
During the period Co-O produced 101,474 ounces of gold at a cash cost of US$189 per ounce and it achieved an average sales price of US$1,371 an ounce (from the sale of 96,217 ounces), which is still some way behind the prevailing gold price of around US$1,800.
In all it increased revenues by 58 per cent, to a new company record of US$149.6 million. It realised a post-tax profit of US$110 million and it ended the year debt free with US$102.1 million ‘in the bank’ – this includes cash equivalent of gold on metal account.
Impressive as these results may be, the current mining operation is just the first in a series of further expansions which ultimately target production of 400,000 ounces each year from the mine from 2015.
It is this exciting future that recently appointed MD Hepburn-Brown is primarily focussed on.
"It is both a privilege and a challenge to be invited to become Medusa's Managing Director as it enters the next growth phase in its quest to become a 400,000 ounce producer by 2015,” Hepburn-Brown said.
“We are confident we have the mineralisation to support these aspirations within achievable time frames.
He added: “This last financial year has been the first full year of production at the rate of 100,000 ounces from the Co-O Mine and we have forecasted production of between 100,000 to 110,000 ounces for the current financial year.
“Over the next few quarters there will be heavy emphasis on development at the Co-O Mine to prepare for the future production increase, similar in principle to a pre-strip at an open pit mine.
“We are developing new levels, sinking new and deeper shafts, and planning infrastructure that will support mining to a depth of approximately one kilometre with drilling to date pointing to good grades up to 750 metres below surface.”
Crucially the existing mining operation provides Medusa with a valuable revenue base that alleviates many of the financial burdens normally associated with a mine development on this scale.
“The company has continued to produce gold at cash costs of just under US$200 per ounce in an economic climate where the gold price has continued to climb,” Hepburn-Brown added.
“The margins generated from gold sales, as evidenced by this year’s record profit, enables Medusa to self-fund the Co-O Mill expansion to 200,000 ounce capacity, continue its extensive exploration programme and pay a dividend twice a year.”
Aside from Medusa’s mine expansion plans it remains very active on the exploration front. The group today confirmed that twenty-one rigs are currently drilling the designated exploration areas around the Co-O mine and nearby.
Indeed during the twelve months, reported on today, Medusa found an additional 560,000 ounces of new gold resources at the property – this includes the replacement of the 101,000 ounces mined during the year.
Co-O’s resource currently stands at 1.96 million ounces and to date 450,000 ounces have been produced from the mine.
Importantly Medusa also confirmed that the drilling carried out this year, along with the new resource estimates, have strongly reinforced Co-O’s conceptual exploration target of between 3 million and 7 million ounces.
“Currently the quantified amount of gold in the deposit of 2,410,000 ounces is approaching the lower limit of this range, indicating the Co-O Deposit is potentially a world class deposit in terms of size and thus promising to be a long life mine,” Medusa said.
During the year Medusa spent US$27 million on exploration and it completed 131,500 metres of core drilling. A further US$27 million has been earmarked for exploration work in the current financial year.
