Medusa Mining (LON:MML, ASX:MML) reported strong full-year financial and production results and is targeting to produce 100,000 to 110,000 ounces of gold in the current full-year at cash costs of around US$200 per ounce.
Pretax profit before interest, depreciation and amortisation rose to US$120.7 million in the year to end-June 2011, up 64 percent year-on-year from US$47 million. The company also posted 58 percent revenue growth to a record US$149.6 million due to increased gold production and a higher price received on sale of gold.
Medusa is an un-hedged gold producer and received an average gold price of US$1,371 per ounce from the sale of 96,217 ounces of gold for the year.
It produced a record 101,474 ounces of gold for the year, an increase of 13 percent from the previous year's production of 89,679 ounces, at an average recovered grade of 12.63 grammes per tonne gold, compared with 16.52 g/t gold previously.
The average cash cost for the year of US$189 per ounce was only marginally higher than last year’s US$184 average.
The group remains debt free and had total cash and cash equivalent of US$102.1 million at the end of the financial year-end, compared with US$55.8 million a year earlier.
Medusa is currently ploughing ahead with preparing the Co-O mine in the Philippines for a future production increase, to attain a capacity of 200,000 oz per annum.
The financial year under review has been the first full year of production at the rate of 100,000 ounces from Co-O. Over the next few quarters there will be heavy emphasis on development at the 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,” the company said.
To date, the Co-O mine has produced around 450,000 ounces and has a current resource of 1.96 million ounces. Drilling during the year and the new resource estimate, announced last week, have strongly reinforced the conceptual exploration target size of 3 to 7 million ounces, Medusa said.
In its annual reserve estimation update last week, the company maintained the gold reserves at Co-O at just over 500,000 ounces. Co-O's gold resource at year end comprised of 616,000 indicated resource ounces and 1,344,000 inferred resource ounces, representing increases of 15,000 ounces and 446,000 ounces within the indicated and inferred categories respectively.