TIDMMML
RNS Number : 8919I
Medusa Mining Limited
22 June 2011
MEDUSA MINING LIMITED
ABN: 60 099 377 849
Unit 7, 11 Preston Street
Como WA 6152
PO Box 860
Canning Bridge WA 6153
Telephone: 618-9367 0601
Facsimile: 618-9367 0602
Email: admin@medusamining.com.au
Internet: www.medusamining.com.au
ANNOUNCEMENT
22 June 2011
PRODUCTION GUIDANCE FY 2011/12
SHAFT UPGRADE & NEW Co-O MILL UPDATE
Medusa Mining Limited ("Medusa" or the "Company"), through its
Philippines subsidiary, Philsaga Mining Corporation ("Philsaga"),
is providing a forecast for its gold production for the financial
year commencing 1 July 2011, an update on shaft upgrades and
progress of the new Co-O Mill.
Key points are:
-- Production guidance for FY2011/12, between 100,000-110,000
ounces at cash costs of circa US$200 per ounce;
-- Major upgrade of Agsao Shaft and additional internal shaft
access from the Baguio Shaft;
-- New Co-O Mill Capex reduced by US$10 million to approximately
US$70 million.
Managing Director Peter Hepburn-Brown commented:
"We are continually striving to improve our operations. The new
Agsao Shaft winder is expected to be in place during July and the
completion of the Saga Shaft to Level 6 is expected in late in
2011. It is planned that the Saga Shaft will be ready to haul ore
early in 2012 from Level 6, and combined with the increased
development rate, will enable the Company to supply increased
amounts of ore to the new Co-O Mill on its completion. It is
intended that the Saga Shaft will be continued to Level 8.
It is also pleasing that we should now be able to achieve
considerable savings on Capex with the new mill and that we are
still on-track to receive permits for the expansion around late
September".
PRODUCTION
Production for the 2011/12 financial year is forecast at between
100,000-110,000 ounces. As foreshadowed in the quarterly report to
31 March 2011, the Company is significantly increasing its rate of
underground development to approximately 800 metres per month which
will result in a higher percentage of lower grade development ore
in the mill feed. This accelerated development program is essential
to prepare the mine for the increased production rates required
under the expansion plans. Production for the September 2011
quarter will be reduced by the development program in place and by
the influence of the following factors:
-- Agsao Shaft refurbishment during July 2011 in preparation for
the winder replacement. The shaft refurbishment will involve
repairing timber sets in the shaft, ahead of the replacement of the
current winder with a much larger and faster winder with a larger
skip to increase the overall efficiency of the shaft. The new
winder will have the capacity to haul approximately 400 tonnes per
day;
-- A connection to a new internal shaft at the bottom of the
Baguio Shaft will be finalised to enable ore to be hauled from
Level 4 (currently only hauled from Level 3); and
-- the opportunity to undertake mill maintenance whilst the
shaft refurbishment work is in progress.
NEW Co-O MILL UPDATE
Since announcing the approval to construct a new mill with the
capacity to produce 200,000 ounces in November 2010, the Company
has evaluated three sites, being two adjacent to the mine (11
kilometres from the current mill) and the third being the complete
remodelling of the current mill site. The initial Capex was
estimated at US$80 million inclusive of mine development and Saga
Shaft.
The recommendation from the Company's consulting engineers after
taking into consideration our current operating environment and
community relationships, and the availability of multiple sites for
additional tailings dams at the current mill site, was to
extensively remodel the current mill site which would maximise the
use of the existing facilities. At this point, this will result in
cost savings of around US$10 million thus reducing the estimated
Capex to US$70 million inclusive of mine development and the Saga
Shaft.
The application to upgrade the Environmental Clearance
Certificate for the current Co-O Mill has been submitted to the
Department of Environment and Natural Resources and is currently
undergoing assessment.
Replacement and transferral of buildings and facilities around
the current mill will commence in July 2011 to make room for the
expansion.
Quotations have been received for the main long lead time items
for the new mill. The order for the SAG mill will be placed during
July 2011.
For further information please contact:
Australia
Medusa Mining Limited +61 8 9367 0601
Geoff Davis, Chairman
Peter Hepburn-Brown,
Managing Director
United Kingdom
Fairfax I.S. PLC +44 (0)20 7598 5368
Financial Adviser and
Broker
Ewan Leggat/Laura Littley
DISCLAIMER
This announcement may contain certain forward-looking
statements. The words 'anticipate', 'believe', 'expect', 'project',
'forecast', 'estimate', 'likely', 'intend', 'should', 'could',
'may', 'target', 'plan' and other similar expressions are intended
to identify forward-looking statements. Indications of, and
guidance on, future earnings and financial position and performance
are also forward-looking statements.
Such forward-looking statements are not guarantees of future
performance and involve known and unknown risks, uncertainties and
other factors, many of which are beyond the control of Medusa, and
its officers, employees, agents and associates, that may cause
actual results to differ materially from those expressed or implied
in such statements.
Actual results, performance or outcomes may differ materially
from any projections and forward-looking statements and the
assumptions on which those assumptions are based.
You should not place undue reliance on forward-looking
statements and neither Medusa nor any of its directors, employees,
servants or agents assume any obligation to update such
information.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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