Medusa Share Discussion Threads

[deka1] 30/9/2015 09:26

Following commissioning of the Co-O Mill in the March quarter of 2014, during the FY2015 the mill has improved recoveries from 85% to 93-94%, completed all major capital works and has performed satisfactorily as shown in Graph 1. The low utilisation in December 2014 /January 2015 was due to the L8 Shaft upgrade. The mill will likely remain under-utilized at the current lower gold prices as the mine concentrates on producing profitable ounces by adjusting cut-off grades accordingly. Medusa is in the fortunate position of being able to take advantage of increasing gold price and/or reduced operating cost to increase tonnages to the mill without further capital outlay. A new tailings storage facility is currently being constructed and will be completed in Q1 FY2016. This will provide storage capacity for at least 4 years at full mill capacity. The mine now has the flexibility to adjust cut-off grades as required according to the gold price so it can continue producing profitable ounces. Stope panels that are below cut-off grade, mainly in the upper levels of the mine, will not be extracted at present. This may result in less tonnes, but more profitable ounces as costs are reduced in line with reduced tonnes mined and milled. Should the gold price increase in the future, the cut-off grade will be decreased and the unmined stopes can be readily mined as development drives are already in place



IMO ithink we will see grades of 7g/t + very soon, trying to read between the lines here, "the mill will likely remain under-utilised at the current low gold price, so if the prod guidance for this year is to be met , the only way to do it is to substantially increase prod grades, any other views welcome .

[jfishy55] 30/9/2015 08:22

Annual Report is out:

[stevea171] 29/9/2015 21:03

PPT back to defending 16,000 on the Dow all day today with intervention short lived rises to try to head off the selling ....

Physical retail silver crunch getting worse. Maybe next month we will see some fireworks in the PM's?!

Silver Shortage Reaches New Level: RCM Turns to Sunshine Mint for Help
September 29, 2015 by The Doc

With silver slammed back under $15 yet again Monday, the retail silver shortage, now in its 3rd month, continues to worsen.

As SilverDoctors readers are well aware, the Royal Canadian Mint and the US Mint have been having the biggest difficulties keeping up with the unprecedented physical demand for silver- so much so that Fund Manager Dave Kranzler speculated this week as to whether the US Mint is intentionally diverting physical silver from the retail market in order to satisfy massive physical demand from China and India.

Essentially all RCM products have been NO OFFER at all of the wholesaler/ distributors for nearly a month now.

As we discussed in this weekend’s Metals and Markets with James Turk, the world’s largest physical silver wholesaler and distributor, advised late last week that it was down to offering only 3 inventory items: 2015 Silver Eagles Delayed until Dec 2nd, and offered at $5 over spot in bulk!, 100 oz Asahi bars delayed until Nov 16th, and 2015 Silver Philharmonics, delayed until October 12th!

The Doc recently held a private conversation with the VP of one of the top 3 US precious metals wholesalers, and he advised that the current investment silver shortage is unlike anything he has EVER witnessed in 30 years of experience in the physical precious metals markets.

If the U.S. and world suffer ANY significant market crash or Black Swan event in the next several months, (or any further silver weakness below $14/oz), expect the current retail silver shortage and premiums to SURPASS what the market experienced in 2008-2009 when premiums soared to 50-100% on many physical silver investment products.

[stevea171] 28/9/2015 14:26

Medusa's web site seems to have recently updated the Narrow Vein Mining section since June this year. It seems there may be new information here:



Worth reviewing eg I always wondered how the miners and mill workers could distinguish between ore material and worthless rock spoil.

>> 'The Co-O Mine narrow quartz veins can be thought of as sheets of white paper generally 1-2 metres thick suspended in green space. The white sheets or veins are essentially filling spaces in the green volcanic wall rocks which form when the rocks crack or are faulted. The volcanic wall rocks are green hence the white veins are visually distinctive underground and are easily followed by the miners.'

>> 'ii) Room and Pillar mining

This method is used on the numerous low-angle veins (described above) where it is difficult to control the dilution from the hanging wall or roof. The minimum mining width for low angle veins is 1.5 metres, hence the higher dilution in low-angle stopes is partly responsible for the overall lower than average grade achieved from the mine.

The productivity of room and pillar stopes is not as high as shrink stopes, and hence they also incur slightly higher costs.

Approximately 20% to 30% of the development ore at Co-O is by definition (in narrow vein mines) taken from Inferred Resources as this development is required as part of the conversion process from Inferred to Indicated Resources (as described previously).

Level and vertical development will continue at approximately 1,500 metres per month to maintain the stope development cycle. Development ore will provide approximately 30% of the mill feed.

[rrr] 28/9/2015 09:49

Thanks Steve.
rrr

[stevea171] 28/9/2015 08:42

Q1 & Q2 results. If Medusa in this quarter are still restricted in bringing up mined ore because of the new shaft development waste and other development waste and thus only supply to the mill the same quantity of ore as in the last quarter but increase the average grade from 6,01 to approx 6.5 gm, this should lift production by approx 2,211 oz to 28,750 oz.

The higher grade is expected as a result of more stopes being worked on the new contract terms that have been progressively applied to all new stopes developed since about April and expected to be complete by the end of this quarter:
Q4 report: "all stopes to be on the new system during next quarter".

Although the average gold price has fallen this quarter from $1197/oz to approx $1125 the cash flow is still likely to be marginally positive because of increased efficiency of the mine from an 8.3% higher average grade offset by an approx 6% fall in the gold price.

Next quarter, Q2, we can expect an average grade of approx 7 gm which should result in further improved efficiency and improved cash flow if the gold price remains firm.

(Q4 Production: 26,542 ounces at a head grade 6.01 g/t gold, cash costs of US$390 per ounce and All In Sustaining Costs (“AISC”) of US$1,076 per ounce. Gold price received $1197.)

[stevea171] 26/9/2015 10:44

Medusa Mining has flexibility to cope with lower gold prices says boss
10:40 25 Sep 2015

Geoff Davies, Medusa’s Mining (ASX:MML) chief executive, said recent drilling has given the company the flexibility to adjust and remain profitable in the current gold price environment.

At the end of June Medusa’s Co-O gold mine in the Philippines had JORC compliant probable reserves of 427,000 ounces from 1.81mln tonnes of ore at a grade of 7.33 g/t.

The estimate was based on a gold price of US$1,150 per oz.

Davies said this price was US$100 per ounce lower than a year ago but reserves had only dropped by 4% and the total had been maintained around the same level for the last seven years.

Medusa’s recent focus has been to develop more resources underground at Co-O and this had increased its room for manoeuvre, said Davies,

“As the understanding of the deposit has increased and new lower levels in the mine are being accessed and developed, it is apparent that we now have the flexibility to adjust cut-off grades to suit the gold price environment to ensure we only mine profitable ounces.

“This policy is being actively pursued in the mine operations and is being reflected in the increasing head grade at the mine,” he added.

“Drilling from Level 8 for the period 2015-17 in combination with development on Levels 9 and 10 should continue to replace the mine’s reserves (and resources) on an annual basis.”

hxxp://www.proactiveinvestors.co.uk/companies/news/111135/medusa-mining-has-flexibility-to-cope-with-lower-gold-prices-says-boss-111135.html

[deka1] 26/9/2015 06:54

Niels hi did he say only 1% of comex is called for delivery ?----how the hell can true price be discovered in such a system.

[nielsc] 25/9/2015 22:04

Steve:

Thanks for that.

Deka:

Liked the gold refinery interview.

Was thinking back to Kyle Bass taking delivery of US$1b of gold for the university of Texas back in 2011 from the COMEX. Around 1600 gold bars, which is around 20 tonnes (US$1562 per oz). Would be hard to do today, but then again price would solve everything ;-)



Cheers,
Niels

[deka1] 25/9/2015 15:55

Cheers steve

[stevea171] 25/9/2015 11:05

Dek.

>>> "we now have the flexibility to adjust cut-off grades to suit the gold price environment to ensure we only mine profitable ounces. This policy is being actively pursued in the mine operations and is being reflected in the increasing head grade at the mine."

Hopefully Q1 results in about 4 weeks time will reflect both a further increase in grade (6.5 gm? maybe 7.0 gm is too much to hope for so soon!) and be cash flow positive despite the gold price massacre that has been in full control for the past 3 months. Av gold price for the past 3 months I make to be about $1125 or only approx $50 above the AISC figure reported for Q4.

(Q4 Production: 26,542 ounces at a head grade 6.01 g/t gold, cash costs of
US$390 per ounce and All In Sustaining Costs (“AISC”) of US$1,076 per ounce.)

[deka1] 25/9/2015 10:40

Increasing grades,i hope they are now hitting 7g +, make a big difference to ozs produced, getting 7.5g as opposed to 6 ish is around 15% more gold , is it not?

[speedsgh] 25/9/2015 10:34

Annual Mineral Resources & Ore Reserve Update Statement -

[stevea171] 25/9/2015 08:32

ANNOUNCEMENT
25 September 2015
AMENDMENT – APPENDIX A JORC (2012) TABLE 1 REPORT ATTACHED
ANNUAL MINERAL RESOURCES AND ORE
RESERVES UPDATE STATEMENT

Geoff Davis, Chief Executive Officer of Medusa, commented:
It is pleasing to note in this period of low gold prices that when we use a reserve estimation gold price that is US$100 per ounce lower than last year’s, in conjunction some other technical adjustments, that we only lose 4% of our reserves, and hence we have now maintained our reserves at approximately the same level for the last 7 years.

As the understanding of the deposit has increased and new lower levels in the mine are being accessed and developed, it is apparent that we now have the flexibility to adjust cut-off grades to suit the gold price environment to ensure we only mine profitable ounces. This policy is being actively pursued in the mine operations and is being reflected in the increasing head grade at the mine.

The drilling from Level 8 for the period 2015-17 in combination with development on Levels 9 and 10 should continue to replace the mine’s reserves (and resources) on an annual basis”.

[noirua] 23/9/2015 23:49

Gold Could Hit $1,600 As Bearish Factors Have Shifted - ETF Securities


Gold Price Forecast: This Should Terrify Goldbugs Everywhere

[stevea171] 23/9/2015 09:23

Tightfist. Hope you are enjoying your trip to Hungary and you are not being pepper sprayed or drenched when you go out by water cannons! Do you speak Hungarian btw?

Volumes and liquidity. You can now buy 2.5 times as many shares at 40c cf the recent share price of $1 for the same money, so volume if anything should rise imo.

[tightfist] 22/9/2015 22:46

Hi Steve,

Many thanks for the latest trading info, the situation unfolded last Friday very much as we foresaw here on/around 3rd September - good info sharing! From a pure charting standpoint, last Friday does look like a capitulation day and a platform to re-build upon.

One wonders how the exit of Van Eck and the GDXJ ETF will affect MML share trading/price action. As I noted in post 34899, the highest quarterly MML trading volumes coincided with GDXJ quarterly re-balancing days, whilst ongoing frequent sales/purchases will have been generated by fluctuations in interest in the GDXJ ETF as a Gold investment vehicle.

On the face of it that suggests trading volumes and liquidity will drop further – any comments, anyone?

Cheers, tightfist

[deka1] 21/9/2015 10:08

Thanks for the info steve.

[stevea171] 21/9/2015 08:51

GDXJ rebalancing last Friday with MML excluded.
30.1m MML shares traded Friday - 15% of issued shares, mostly in the auction at close.

Short positions were taken in the run up, taking the share price down from 50c ahead of the expected opportunity to buy back on the GDXJ rebalance date when an MML sale of the century would occur.
In the auction there were huge bids for millions of stock but 37c was the low for the day in the auction. Maybe there will be an institutional holding RNS in a few days reporting who has swept up some of this fire sale stock.

Now that this is out of the way and gold is starting to move up again will we see Medusa stage some sort of recovery? More buyers than sellers today with one buyer on the order book after 1 million shares at 35c.

Annual report likely to be issued this week or next before the EoM.

[arja] 18/9/2015 12:58

newcrest up 7% and MML down 3% even on firmer gold price . Hit 41 too and looked like it might be turning but again a false alarm .

[deka1] 18/9/2015 08:30

over 15 million traded last night

[nielsc] 18/9/2015 08:04

chipperfrd:

Thanks. Not a big short position then.


deka:

As expected the FED didn't decide to bankrupt itself. They can't raise rates all they can do is pretend they will. How many times can they cry wolf?

Cheers,
Niels

[chipperfrd] 18/9/2015 05:48

Accrding to the Sec report there were 7.3m outstanding short positions as of 14th September (3.51%). So not too big a deal!

Others in the same space:

Kingsgate was 7.37%
Beadell 4.07%
Newcrest 2.32%
Northern Star 4.75%
Perseus 3.54%
Regis 5.49%

Just the usual stance of managed money for quite a while now. I guess they will predominently stay bearish until they don't anymore. But as for timing, who knows!
Chip