MML are an existing gold producer on the island of Mindanao, and are looking to expand production towards 100,000 ozs Pa during 2007.

Mining costs are low, around $250 per oz, and with gold around the $650 level, there is a healthy margin.

MML have returned good grades in recent exploration, and have an exploratory copper project within their licence area.


recent analysis - Click HERE


MML look undervalued compared to their peers, IMO.

Hold and be patient, 500p by year end, regardless of gold price. (or buy at this very low price if you have funds).

Agree,here's a mine costing chart,with Co-o 2nd from left.

http://www.zerohedge.com/news/2013-04-18/soft-cost-curves-hard-assets-where-cash-flow-hits-road

From a trusred and well respected pi concernibg yesterdays presentation.Gold creeping back up slowly,breaking $14450 would be nice.

==============================================================
I attended (and it was really good to meet up with a number of people who use this BB). I am a little short of time this morning so cannot do much at the moment - perhaps others will also add their comments.

I thought the presentation was very upbeat and re-assuring on all points.

They have a relatively small residual amount of Capex left to outlay on the mill/mine expansion and do not appear concerned about working capital.

They appear to be sticking to their plan to self-fund Bananghilig from Co-O cash flow and will resume dividends once this has been achieved (c. 18 months).

Co-O will then stick at 200koz pa on an ongoing basis with exploration limited to sustaining a rolling 10-year mine life by replacing depletion and maintaining a 2m oz recoverable resource into the foreseeable future.

I will add more later.
Chi

Ok, back again. A few more points:

New mill expected to have an improved recovery - 94%

Expecting to move up to a process capacity of 2,500tpd from July. They are already at that rate from the mine so will be stockpiling excess tonnage this quarter. Intend to maintain a ROM stockpile in the future in order to mitigate any occurrences of weather events.

Have built a dual, mains-fed, power distribution system which has sufficient redundancy to feed both mine and mill from a single transformer in the event of any failure. Normal operation will be with the mine being fed from one transformer and the mill from a second transformer.

Now have 3 Alimak systems working within Co-O.

I asked the MD about the exceptional (749g/t) intercept reported in February. It is not due to 'nugget effect' but to 'black leader stockwork'. He says that their underground onward advance drilling tends to be in groups of 10 holes per vein in order to plan stoping. The afore-mentioned, high-grade hit was just a lucky chance as they have no way of predicting where 'black leaders' may exist.

Long-time users of this BB will remember quite a significant amount of high-grade production due to 'black leader' stockwork during 2010.

Now that they have so many more veins across the width of the Co-O mine at varying grades they plan to maintain a blended grade of c. 8g/t from an aggregate of development and stoping ore.

They will maintain a high level of development advance going forward in order to keep and maintain the 200koz pa rate.

Copper prospects are a low priority but they are keeping to their overall strategy of trying to prove up sufficient resources (when the exploration budget allows) in order to sell on. They have no intention of mining copper. They are entirely focussed on gold.

Co-O benefits from tax incentives (based on economic improvements generated by the mine in the local communities). It is currently in year 3 of the 4-year allowance and can be extended by a further 2 years. The new mine/mill expansion comes with a further 4 year plus 2 further year extensions.

Bananghilig will qualify for a 6-year (plus 2 year extensions) for similar reasons.

Government are likely to raise their royalty for Bananghilig from current 2% to 5%. So with local royalty of 1% it is best if we assume an overall NSR royalty of 6% for the Bananghilig operations.

MML are entirely focussed on their present tenements and are not planning any expansion into other countries or projects other than those which it already has.

Once Co-O is steady state at 200koz pa and once the Capex for Banaghilig is raised from Co-O cash flow, they intend to return a progressive amount of surplus cash flow to holders via dividends. Likewise any sales of copper assets.

Chip

With gold clombing back above $1450,it's looking promising. Quarterly results due next week and futher from the presentation,


Quarterly due next week. The MD says that he is itching to take advantage of the pull-back but has to wait for the closed period window to open. We shall see how he reacts regarding his own holdings. He comes across very well and is very knowledgeable as you would expect.

Part of a follow-up email from ProActive:

The splendid wood-panelled ballroom of stockbroker Killik & Co provided the venue for our latest One2One Forum. This was a more intimate affair than usual, with 75 guests meeting just one company – Medusa Mining. For the uninitiated, Philippines-based Medusa is a rarity in the sector – a producer that could survive in just about any gold price environment. However the company isn’t resting on its laurels and managing director Peter Hepburn-Brown provided us with a compelling vision for growth. It included bringing production at the Co-O mine up to 200,000 ounces of the precious metal, followed by the development of Bananghilig, which will see output double from there. All of this will be augmented with a healthy dose of exploration, which will undoubtedly extend Co-O’s mine life. The restoration of Medusa’s dividend is around 18 months away, Hepburn-Brown told us. So this may be one for the income hunters as the story unfolds.

From another well respected and knowledgable PI.


Hi Chip, Hertsbirder, Wolstencroft et al,

Nice to see you all on Wednesday and for your posts. Most of the the things I noted have been covered in those posts.

Most important for me was PHB's reassuring statement that the company did not need to raise funds, neither from debt nor from equity.

The new mill at Co-O will be automated (the current mill is manually operated) and this is expected to increase recoveries to 94%. PHB intends/expects to maintain Co-O resources at 2.5Moz through explo. drilling, leading to a 10 year rolling mine life, at 80% conversion of resources to recovered gold. We should see Co-O resources increased to 2.5Moz by the end of this FY (June).

As Chip has mentioned, PHB expects to move to a 50% mix between development and stoping ore. Development is currently proceeding at 1,000m/month. The mill will operate best when it is fed a consistent grade by mixing development and stope ore. ISTM that in the period before the current expansion was undertaken, there wasn't sufficient development carried out, which is one of the factors that has led to below expectation production now. However, the lack of haulage capacity was a major constraint which the new Saga shaft and other shaft upgrades should alleviate. The Saga shaft is now hauling 1,500tpd and all other shafts combined haul a further 1,000tpd.

Once sufficient cash has been built up to self-fund B'hilig construction, PHB said that the company will change its dividend policy to distribute a percentage of net earnings.

The vein width at the 8 level is around 2m, whereas it was 1.5m at shallower levels. This should mean less ore dilution in future, as the minimum safe on-vein drive width can be dug with a lower amount of waste rock being included.

Contract mining will be used at B'hilig (=> less CAPEX but more OPEX).

PHB stated that the new mill tie-in was "occurring as we speak". The new leach tanks are already in use.


I have previously written to PHB to query my calculation of bullion stocks (but received no response). I asked him about this but didn't really receive a satisfactory explanation, except to advise that Medusa had now sold all its previous stock. He promised to respond with more detail.

Privately, I also expressed my disappointment with the missed forecasts, and PHB accepted that meeting the new targets was now crucial. He appeared confident and felt he was now being sufficiently conservative but, of course, only time will tell.

In summary, all seems hunky-dory but I guess we'll have to wait until October to see confirmation of the big production leap we're expecting. Meantime, confirmation of a satisfactory cash position in the March quarter figures we should get next week ought to reassure the market.


Cheers,

Mark

http://www.proactiveinvestors.co.uk/companies/stocktube/1949/medusa-mining-targets-400000oz-gold-production-by-2016--1949.html

Medusa Mining* (MML LN) 219p, mkt cap £413m – Quarterly Activities Report Highlights Expansion of Production for FY 2014

Buy – Target Price 505p (previous 585p)

•Quarterly production should be seen in the context of development to expand the mine.
•The company reported quarterly production to 31 March 2013 of 14,021 oz giving them year to date production of 46,601 oz.
•Grades mined of 6.76 g/t gold were down from the previous quarter of 8.16 g/t gold reflecting the increase mix of development ore being treated through the mill.
•Mine haulage capacity has also been limited over the period which will now be overcome with the completion of the Saga Shaft with capacity of 1,500 tpd.
•The production range for the financial year to end-June 2013 has been guided down to 70,000 to 80,000 oz from 80,000 to 90,000 oz reflecting the pace of development ahead of mine and mill expansion.
•Expansion on target and on budget: Production is on schedule from the new mill in June/July this year.
•The new Sag mill and crusher are on schedule for commissioning in June.
•The leach tanks have been upgraded and converted to CIL and the detoxification plant was commissioned in April.
•The tie in of the new leach circuit to the crushing circuit will result in 4 weeks of loss in production which has been taken into account in new production targets for FY 2013.
•Mine development continues to meet expansion requirements: The lateral development underground has accelerated to a minimum of 1,000m a month from 800m per month recently with a high proportion of lower grade development ore being fed into the current mill and also stockpiled.
•Around 200m of Level 8 development has been finished with four veins intersected giving greater flexibility and production capacity.
•Development for the quarter was 2,317m with 50 development headings on vein, 20 vertical rises on ore and 15 on waste.
•Bananghilig Feasibility on track: The feasibility is expected to be completed in the September quarter with the company looking to finesse and improve parameters released with the recent scoping study.
•This open pit bulk mining project is being targeted for production in 2016 with ramp up in FY 2016.
•Current parameters for the Bananghilig project are 200,000ozpa for a 5 mtpa milling operation with recovered grades of 1.3 g/t, strip ratio of 4:1 and 80% recoveries.
•Cost of capex including pre-strip is projected at US$220m with an indicative cash costs excluding 3% royalties of US$565/oz. Royalties are likely to increase to 6% including the 1% community royalty with the passing of the new mining act.
•The plan is for Bananghilig to be funded from cash flows from Co-O.
•Cash and cash equivalent at the end of the quarter stood at US$8.91m.
•Most of the major expenditure for the mine expansion and development has been undertaken.

Conclusion: The lower production for the quarter and the revised production for FY 2013 should not be a surprise and is in our view historic – the old mill is close to the end of its life and mine development to meet the mill expansion has impacted grades and production. The key for the stock is the expanded production with the new mill to be commissioned in June.
The expansion to 200,000 oz should give operating cash flows of US$210m based on a total cash cost of US$400/oz and current gold prices of $1450/oz. This will more than cover the on going exploration and development work at Co-O and fund works to bring Bananghilig on stream targeted for 2016 and rebuild the company’s cash position.
We have brought back our target price to reflect the lower near term production, higher cash consumption and lower gold prices.
At current prices there is significant upside in the share price with PE and EV/EBITDA multiples coming down from 10.5x and 7.9x in 2013(F) to 3.4x and 2.7x respectively.

sp 178p still falling.

Yes a reaction to the recent quarterly report which showed a drop in production,it's affected senitment and the market is looking elsewhere at presemt,this in turn creates a buying opportunity imo,just judging the bottom?

Worth re-reading the following,

Conclusion: The lower production for the quarter and the revised production for FY 2013 should not be a surprise and is in our view historic – the old mill is close to the end of its life and mine development to meet the mill expansion has impacted grades and production. The key for the stock is the expanded production with the new mill to be commissioned in June.
The expansion to 200,000 oz should give operating cash flows of US$210m based on a total cash cost of US$400/oz and current gold prices of $1450/oz. This will more than cover the on going exploration and development work at Co-O and fund works to bring Bananghilig on stream targeted for 2016 and rebuild the company’s cash position.
We have brought back our target price to reflect the lower near term production, higher cash consumption and lower gold prices.
At current prices there is significant upside in the share price with PE and EV/EBITDA multiples coming down from 10.5x and 7.9x in 2013(F) to 3.4x and 2.7x respectively.

I make the value around £47k by the CEO?

http://www.investegate.co.uk/medusa-mining-ltd--mml-/rns/director-s-shareholding/201305030900019620D/

sp 166p continues to sink like a stone made perhaps of gold?

sp 117p still falling.

sp falls again to 106.25, something wrong here?

Will production be down? Will medusa need finance to complete modernisation? any effect of new taxation laws? These are some of the issues been asked ,but 6 months from now should not be relevant. Small rebound today. Is this the bottom?

Looking at this one - haven't bought yet. Just following if that's ok.

Share trader - don't suppose it's possible to have a chart for MML at the top?

sp 100p still falling.

The company who manage the mill expansion have gone bust before completion. This may affect production. Is this the reason for the drop in share price? People in the know had prior knowledge.

o-O MILL EXPANSION PROJECT MANAGERS APPOINT ADMINISTRATORS

(ASX & LSE: MML)

Medusa Mining Limited ("Medusa" or the "Company") wishes to advise that the ASX listed entity, All Mine Group, the parent company of Arccon (WA) Pty Ltd who manage the Co-O Mill expansion, appointed WA Insolvency Solutions Pty Ltd as administrators on 20 June 2013 (see ASX announcement under ticker AZG dated 20 June). The Company was advised by letter Thursday evening 20th June.

Medusa is currently uncertain as to the timing and the effects on completion of the finishing touches to the mill and full circuit commissioning as dedicated commissioning personnel were scheduled to mobilise to site imminently. Discussions are expected with the administrators and direct communications with personnel on site are underway to minimise disruption to site activities.

The Company will provide further updates when more information becomes available.