Medusa lowers guidance

MEDUSA Mining has reduced 2013 financial year production guidance for the Co-O gold mine in the Philippines from 100,000-120,000 ounces of gold down to 80,000-90,000oz.
Medusa lowers guidance Medusa lowers guidance Medusa lowers guidance Medusa lowers guidance Medusa lowers guidance

Managing director Peter Hepburn-Brown said while the mill expansion at Co-O was on schedule for commissioning in June 2013, the company reduced the production guidance for the year to account for longer than expected timing on certain adjustments and to allow for further time overruns.

"Updated planning and scheduling for the tie-in of the new mill to the existing facilities in the June quarter indicates that the tie-in period will take longer than the original timeframe estimated before construction commenced of two to three weeks," Medusa said.

"This will result in reduced milling time due to interruptions and has been taken into account when re-estimating production guidance for the remainder of FY2013."

The company also fell significantly short of its 2012 calendar year production target of 95,000-100,000oz, with final figures coming in at just 66,395oz.

Medusa mined 89,504 tonnes at Co-O, an increase of almost 27% from the September quarter, while the recovered grade was up to 8.16 grams per tonne gold from 7.5gpt the previous quarter.

The site produced 18,177oz of gold at a cash cost of $US279 per ounce, the best figures since the March quarter.

Despite higher production and recovered grade rates at Co-O, sales were down in the December quarter.

The company sold 18,492oz gold at an average price of $1731 per ounce, down from the September quarter when it sold 25,000oz gold at an average price of $1636/oz.

Mill availability for the quarter was reduced by a week due to the re-lining of the Dominion ball mill.

Commissioning of the Saga shaft was delayed four weeks to mid-January due to difficulties encountered with skid and pipework installation above level 8.

The company received approval to upgrade the environmental clearance certificate for the Co-O mill to 2500 tonnes per day on October 9 and is going ahead with construction of a new mill with capacity to produce 200,000oz of gold per year.

Total estimated capital expenditure, inclusive of mine development and shaft sinking, for the phase 3 expansion of Co-O is expected to be $70 million.

Medusa anticipates a better CY2013 and FY2014, with production targets of 150,000-160,000oz and 200,000oz respectively.

Exploration expenditure was down $2.4 million to $6.1 million on the quarter, while associated sustaining capital at the mine and mill, plus costs for mill construction and infrastructure meant the amount spent on capital works more than tripled quarter-on-quarter from $6.4 million to $23.9 million in the December quarter.

Total cash, cash equivalent in gold on metal account and bullion at site was roughly $15.7 million at December 31.

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