Medusa Mining's managing director Peter Hepburn-Brown has billed the group's current financial year to June 2012 as a "transition" one when production will drop from 100,000 ounces of gold to 75,000 ounces. The lower output reflects the effort the company is putting into increasing the amount of material it is able to haul up from underground operations and accelerating development of the Co-O mine in the Philippines. If all goes to plan, these developments could lift output from the mine to 200,000 ounces a year by 2014.
The company continues to accelerate its development programme, which includes installing large-scale haulage at the Saga Shaft. This is expected to be fully operational from 350m below surface by the end of 2012. Based on encouraging drill results, Medusa is planning another deep shaft in the Agsao area, initially to 750m but potentially to a final depth of 1,000m. The depth makes this a major undertaking although success would "cement the long-term future of production from Co-O".
Medusa produced 26,780 ounces of gold in the six months at a decent grade of 8.1 grammes per tonne, although this was significantly lower than the 14.28 grammes per tonne achieved in the comparative period. Brokers are updating their forecasts in light of these results.
| MEDUSA MINING (MML) | ||||
|---|---|---|---|---|
| ORD PRICE: | 403p | MARKET VALUE: | £761m | |
| TOUCH: | 400-405p | 12-MONTH HIGH: | 568p | 277p |
| DIVIDEND YIELD: | 1.7% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 154¢ | NET CASH: | $38m | |
| Half-year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (A¢) |
|---|---|---|---|---|
| 2010 | 78.3 | 58.1 | 31.0 | 5 |
| 2011 | 40.9 | 24.1 | 12.7 | 5 |
| % change | -48 | -59 | -59 | - |
Ex-div: 7 Mar Payment: 23 Mar £1=$1.581 £1=A$1.482 | ||||
