Gold miner Medusa Mining Limited (ASX:MML, LON:MML) said it has made significant progress on its five focus areas of development at the Co-O mine.
The company, reporting on performance in the six months to the end of December 2016, said the benefits of the work on some of these areas will start to be felt in the second half of the financial year.
Others, such as work on the E15 service shaft, will not feed through until the next financial year (running to 30 June 2018).
The Philippines-focused gold miner said production in the final quarter of last year was affected by additional maintenance work required for the level 8 (L8) production shaft.
It produced 35,807 ounces of gold, compared to 61,169 ounces in the same period of 2015, at an average recovered grade of 5.02 grams per tonne (g/t) versus 6.80 g/t the year before.
The company has revised its production guidance range for the full year to 85,000 – 95,000 ounces at an all-in sustaining cost (AISC) of between US$1,250 and US$1,350 per ounce of gold.
“We expect the L8 Shaft hoisting availability to be resolved in the March quarter, allowing us to deliver to the back-end loaded full year plan, albeit later than the original guidance,” the company said.
AISC for the half year was US$1,408 an ounce, up from US$951 an ounce in the same period of 2015.
The investment in the infrastructure development strategy, seen as critical to the mine’s future performance, plus the lower-than-expected production in the October-December quarter, resulted in a decline in cash (and equivalent) reserves to US$12.9 million from US$16.0mln the year before.
Medusa drilled around 23,000 metres to expand the down-dip potential at the Co-O mine, and chairman Andrew Teo said this rate of drilling will continue in the second half of the financial year.
Revenue in the half-year period fell 28% to US$50.1mln from US$69.7mln the year before.
Underlying earnings (EBITDA) were negative at US$32.7mln, reflecting non-cash impairment adjustments of US$55mln; the previous year the company had posted positive EBITDA of US$40.4mln.
The loss per share was 19.6 cents versus earnings per share the year before of 15.1 cents.