Medusa Mining (ASX: MML, LON: MML) has received an increased share price target from Cantor Fitzgerald, citing operational improvement at the Co-O mine in the Philippines.
The target was lifted from 222p from 190p. In Australia, the stock closed marginally lower Tuesday at A$2.35.
Analyst Asa Bridle suggests there is returning interest in the stock, as evidenced by the 18% rise in the shares in the last three months, backed by the gold price's recovery.
After a delay to commissioning due to equipment and weather, the mill started up in early December but this resulted in lower output for the December quarter.
In interim results last week, the firm revised gold production guidance for the year to end June 2014 to between 70,000 to 80,000 ounces (oz) at anticipated cash costs of US$400 per ounce.
It sees full-year 2015 output of between 140,000-160,000oz and production from 2016 onwards of 160,000-200,000oz a year.
Bridle notes that further weather-related issues in January and the weak comparatives in the interims could have been taken as backwards step.
"However, in our view, the operational position reported looks even stronger now, and the first publication in some time of production guidance provides a fresh frame of reference."
He notes that the 200,000 ounce production target does remain, albeit as a top end range figure in full year 2016.
"We have been in a ‘downgrading’ spiral with MML for some time, but we are hopeful that our latest forecast, backed by the company’s current operating position, should prove conservative," said Bridle, who rates the shares a 'buy' and lifts the target price to 222p from 190p.
Medusa shares dipped on Tuesday 3.71% to stand at 123.25p.
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