Medusa Mining (LON:MML, ASX:MML) said the commissioning of the new US$70mln mill at its Co-O mine in the Philippines is “nearing completion”.
The upgrade will allow the group to produce at an annualised capacity of 200,000 ounces of gold a year.
In the year to June 30 output was 62,243 ounces of the yellow metal at a very competitive cash cost of US$313 an ounce (up from US$261).
Giving guidance for the September and December quarters, it said production would be 17,000 ounces and 35,000 ounces, respectively.
Medusa added that full-year guidance for 2014 will be available once the new Co-O mill is fully commissioned and further development has been completed on Level 8 of the mine.
The update was released as Medusa filed results for the year ended June 30.
They showed the group posted a 9% rise in earnings before interest and tax to US$63.2mln on revenues of just over US$100mln.
Medusa has cash and equivalent resources of US$7.45mln as well as a US$14mln overdraft facility.
The shares rose almost 2% to 161p in morning trade. However the resources boutique SP Angel reckons the stock has been oversold and maintains its ‘buy’ and 300p price target.
It said the numbers chimed with recent guidance, although the cash costs were marginally lower than it predicted.
“Development work continues at Level 8 and is now moving away from the faulting near the shaft with vein widths and grades said to be improving. This is good news and could start to improve grades coming through,” said analyst Carole Ferguson.
“The company put an overdraft facility in place to be able to meet cash requirements during the development phase but with most of the spend behind them should be able to build up cash balances.
“Management are keen to reinstate dividends which should be supportive to the share price.”
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