Medusa Mining Limited
TSX : MLL
ASX : MML
LSE : MML

Medusa Mining Limited

February 23, 2011 03:49 ET

Medusa Achieves Record Half-Year Profit

TORONTO, ONTARIO--(Marketwire - Feb. 23, 2011) - Medusa Mining Limited (ASX:MML)(LSE:MML)(TSX:MLL) ("Medusa" or the "Company"), is pleased to present its interim financial results for the six months to 31 December 2010, highlighted by a record half-yearly Net Profit After Tax ("NPAT") of US$58.1 million, up 105%.

HIGHLIGHTS FOR THE SIX MONTHS:

Financials

           
Description Unit Dec 2010 Dec 2009 Variance (%)
 Revenues * US$ $78.3 M $41.3 M $37.0 M 89%
 EBITDA US$ $63.3 M $31.5 M $31.8 M 101%
 NPAT US$ $58.1 M $28.3 M $29.8 M 105%
 
* Includes the sale of bullion that relate to prior year's production (previously re-classified from revenue to inventory at 30 June 2010 to comply with Australian Accounting Standards). Refer 2010 Annual Report.
 
  • Earnings before interest, tax, depreciation and amortisation ("EBITDA") of US$63.3 million, up 101% from US$31.5 million in the prior corresponding period;

  • Earnings per share ("EPS") of US$0.310 on a weighted average basis, based on NPAT of US$58.1 million (six months to December 2009: EPS of US$0.168 based on NPAT of US$28.3 million);

  • Revenues increased 90% to a record US$78.3 million, due to increased gold production and a higher price received on sale of gold. Medusa is an un-hedged gold producer and received an average gold price of US$1,291 per ounce from the sale of 48,883 ounces of gold for the half-year to December 2010 (corresponding period to December 2009: 39,162 ounces at US$1,047 per ounce);

  • The Company remains debt free and had total cash and cash equivalent in gold on metal account of US$87.2 million at 31 December 2010 (corresponding period to 31 December 2009: US$35.5 million).

To view the Revenue chart, please visit the following link: http://media3.marketwire.com/docs/676104A.jpg

Operations          
 
Description Unit Dec 2010 Dec 2009 Variance (%)
Production ounces 51,127 39,162 11,965 30%
Cash costs US$/oz $186 $189 $3 1%
Gold price received US$/oz $1,291 $1,047 $244 23%
  • The Company produced a record 51,127 ounces of gold for the half-year, an increase of 11,965 ounces or 30% from the previous corresponding period, at an average recovered grade of 14.28 g/t gold (six months to December 2009: 16.65 g/t gold);
  • Average cash cost for the half-year of US$186 per ounce, was marginally lower than the previous corresponding period's costs of US$189 per ounce;

To view the Production chart, please visit the following link: http://media3.marketwire.com/docs/676104B.jpg

Production Outlook

The revised forecast gold production for the fiscal year to 30 June 2011 after taking into account current production of 51,127 is now 102,000 ounces at anticipated cash costs of US$190 per ounce.

A breakdown of actual and budgeted production ounces and cost per ounce by quarters for the last six quarters and the remaining two quarters of this fiscal year is highlighted in Graph 1 below.

To view the Production graph, please visit the following link: http://media3.marketwire.com/docs/676104C.jpg

New Co-O Plant

The Board on 17 November 2010, approved construction of a new Co-O plant with capacity to produce 200,000 ounces per year.

Capital requirements of the new plant (inclusive of mine development) are estimated at US$80 million and will be funded out of cashflow.

The preliminary construction schedule after regulatory permitting is estimated to be 21 months.

                       
  2011       2012         2013  
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
 
Permitting,
engineering
and
construction
contracts
Construction
commences
Production
commences
     

Dividends

The Board has approved an interim un-franked dividend payment of A$0.05 per share payable to shareholders on 23 March 2011.

The relevant dates for the interim dividend are as follows:

Dividend Record Date : 11 March 2011
   
Ex-Dividend Date (ASX purposes) : 07 March 2011
   
Ex-Dividend Date (LSE purposes) : 09 March 2011
   
Ex-Dividend Date (TSX purposes) : 10 March 2011
   
Dividend Payment Date : 23 March 2011

There is no foreign conduit income attributed to the dividend.

Geoffrey Davis, Managing Director of Medusa, commented:

"I am pleased to report that operations have continued smoothly for the half year to 31 December with the Company achieving record production at the low average cash cost of US$186 per ounce. This record production and elevated gold prices have contributed to a record half-yearly net profit after tax of US$58.1 million.

Exploration is continuing around the Co-O Mine to increase the likelihood of new vein discoveries to provide additional production. Mine development is continuing with the sinking of the 3- compartment Saga Shaft underway, and the commencement of a new adit to access the Royal Veins and the newly discovered North Tinago vein systems.

The approval by the Board to construct a new Co-O mill with capacity to produce 200,000 ounces of gold is an integral part of the Company's growth strategy. The Company is advancing the permitting process, and is currently engaged in discussions with engineering design and construction groups.

We are also pleased to report that the payment of a dividend twice a year will be an on-going policy to return benefits to our shareholders."

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.

The complete Half Year Report for December 2010 is available for viewing on our website www.medusamining.com.au

ABN: 60 099 377 849

Contact Information

  • Australia
    Medusa Mining Limited
    Geoffrey Davis
    Managing Director
    +61 8 9367 0601
    or
    Medusa Mining Limited
    Roy Daniel
    Finance Director
    +61 8 9367 0601
    www.medusamining.com.au
    or
    United Kingdom
    Fairfax I.S. PLC
    Financial Adviser and Broker
    Ewan Leggat/Laura Littley
    +44 (0)20 7598 5368
    or
    Lothbury Financial Services Limited
    Michael Padley/Libby Moss
    +44 (0)20 7868 2010
    or
    Canada
    Nicholas Sayce
    Investor Relations
    +1 416 822 4404