AFTER a difficult year at Co-O Gold Project, Medusa Mining expects to maintain production in the 2017/18 financial year at between 80,000 and 90,000 ounces. The company produced 80,743 ounces in the year ending June 30, compared to 108,578 ounces in the previous year.
|A 3D model of the underground vein system at Co-O.|
The average cash cost of US$595 per ounce for the 12 months, including royalties and local business taxes, was higher than the previous year’s average of US$466 per ounce. The All in Sustaining Cost (AISC) was US$1374 per ounce compared to the previous year’s US$999, primarily as a result of a drop in production. AISC for the current financial year is expected to be between US$1050 and US$1200 per ounce.
Major write-offs, including US$70.8 million in impairments and US$7.1 million in exploration, meant an underlying loss of US$35.2 million for the period with a net deficit of US$62.1 million. Revenues fell from US$128.1 million to US$100.1 million, although the gold price per ounce received increased to US$1256 per ounce.
Completion of the E15 Service Shaft by the March quarter of 2018 is expected to free up the L8 production shaft with improvements in performance starting to come through almost immediately from that point.
Medusa says the guidance is governed by completion of the shaft. Once completed, E15 will unconstrain the L8 Production Shaft as all manpower and materials will be removed and L8 becomes a dedicated skipping shaft. The guidance also assumes that Co-O will realise improvements in the March 2018 quarter and allowing a reasonable transition period.
Medusa has not been subject to any formal intervention as a result of a crackdown on miners orchestrated by the Philippines Department of Environmental and Natural Resources.
The Co-O mine is on the island of Mindanao where martial law was declared on May 25 and is still in force, though so far the company has reported no disruptions to its operations.
Medusa is still exploring at and near Co-O, including at Bananghilig deposit, in a bid to replenish reserves and resources, and management expects ongoing exploration to continue to find new areas to mine.