Co-O delivered 25,505 ounces of gold grading 20.6 grams per tonne gold at cash costs of $US180 per ounce.

The result compares with production of 21,108oz at cash costs of $184/oz in the December 2009 quarter.

The phase 2 expansion at Co-O is now complete and the mine is running at an annualised rate of 100,000oz per annum.

The underground mine is operating with five levels at 50m apart, with a sixth level to open mid-year.

Medusa is unhedged and did not sell any gold during the quarter, choosing instead to retain its entire quarterly production as bullion or on metal account.

The company is also debt-free and finished the March quarter with $US48 million ($A51.5 million) cash and cash equivalent.

Perth-based Medusa is listed on London's Alternative Investment Market, the Toronto Stock Exchange and the Australian Securities Exchange.

Shares in Medusa were up A10c this morning to $4.30 in Australia.