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Philippines orders mines shut: Medusa unaffected, but nickel sentiment boosted

The Philippine authorities are cracking down on environmental violations, but Medusa is unaffected

Medusa's gold production continues apace

Medusa Mining Limited (ASX:MML) has confirmed that it will not be subject to any formal gazetting, sequestration or forced closure as a result of the current government crackdown on miners being orchestrated by the Philippine Department of Environmental and Natural Resources.

The DNER issued a list of 29 operations that will be subject to various forms of action, including local champions Berong Nickel and Lepanto, both of which have done deals in the past with Australian or London-listed companies.

The closures, which will cut Philippine nickel production by a fifth, may not be permanent, as Reuters has reported that a review undertaken by the Mines and Geosciences Bureau has argued that many of the violations are rectifiable.

Nonetheless, investors are now taking renewed interest in nickel, a metal which has been out of favour for some years now, as the Philippines is the world’s top supplier.

Medusa, meanwhile, continues to produce apace.    

In quarterly results for the period to the end of December the company’s Co-O mine produced 17,350 ounces of gold at an average head grade of 4.75 grams per tonne.

All-in sustaining costs ran at a chunky US$1,498 per ounce as upgrades to plant and infrastructure continued. But cash costs were a healthy US$625 per ounce. The company had US$12.9 mln cash and bullion on hand at the end of the quarter.

The company expects to produce between 85,000 and 95,000 ounces of gold for the full fiscal year, at all-in sustaining costs of between US$1,250 and US$1,350.

Quick facts: Medusa Mining

Price: 0.7 AUD

Market: ASX
Market Cap: $145.46 m

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