Geoff Davies, Medusa’s Mining (ASX:MML) chief executive, said recent drilling has given the company the flexibility to adjust and remain profitable in the current gold price environment.
At the end of June Medusa’s Co-O gold mine in the Philippines had JORC compliant probable reserves of 427,000 ounces from 1.81mln tonnes of ore at a grade of 7.33 g/t.
The estimate was based on a gold price of US$1,150 per oz.
Davies said this price was US$100 per ounce lower than a year ago but reserves had only dropped by 4% and the total had been maintained around the same level for the last seven years.
Medusa’s recent focus has been to develop more resources underground at Co-O and this had increased its room for manoeuvre, said Davies,
“As the understanding of the deposit has increased and new lower levels in the mine are being accessed and developed, it is apparent that we now have the flexibility to adjust cut-off grades to suit the gold price environment to ensure we only mine profitable ounces.
“This policy is being actively pursued in the mine operations and is being reflected in the increasing head grade at the mine,” he added.
“Drilling from Level 8 for the period 2015-17 in combination with development on Levels 9 and 10 should continue to replace the mine’s reserves (and resources) on an annual basis.”