JOHANNESBURG (miningweekly.com) – Philippines-focused gold miner Medusa Mining on Tuesday reported revenue was down by 47%, to $40.9-million, compared with $78.3-million for the corresponding period in the previous year, owing to decreased gold production as a result of planned mine expansion and development.

The LSE- and ASX-listed company said it produced 25 780 oz of gold for the first half of the financial year, while mine expansion had started at its Co-O mine.

The miner set a production target of 75 000 oz of gold by the end of its financial year on June 30, at a cost of $230/oz.

The average cash cost increased to $261/oz in the six months under review, which was higher than the previous corresponding period’s costs of $186/oz.

The slower production rate was partially offset by an above average gold price.

The miner is an unhedged gold producer and received an average gold price of $1 655/oz from selling 25 446 oz during the half-year to December. In the previous corresponding period, Medusa sold 48 883 oz at $1 291/oz.

“It is always difficult to expand an operation and produce at the same time. However, with the team we have on site, assisted by our consultants, we are confident we will achieve our timelines for the Co-O expansion, barring interference from the weather,” Medusa MD Peter Hepburn-Brown said in a statement.

Earnings a share slumped by 59%, to 127c on a weighted average basis, when compared with the 310c increase per share in the corresponding period in the previous year.

The company remained debt free and had total cash, cash equivalent in gold on metal account and bullion on hand of $80.2-million.

“This financial year is a year of transition at the Co-O mine, while expansions to the haulage capacity from underground are completed, and accelerated development is prioritised. New, large-scale haulage in the form of the Saga shaft started in January.

“Progress has been good, and we anticipate the shaft will be fully operational from 350 m below the surface in the last quarter of this year,” Hepburn-Brown said.

This will allow the miner to develop more levels ahead of increased production and to stockpile ore ahead of a new mill expected to start operation in mid-2013.

Further, Medusa is preparing to construct another potential deep-level shaft, following exploration successes east of the Agsao shaft.

At the Bananghilig deposit, drilling is continuing with emphasis on converting the historic 650 000 oz inferred resource and additional inferred resource ounces to the indicated category, aiming at an initial reserve of about one-million ounces for a 200 000 oz/y operation.

“Our growth plans remain intact and are progressing steadily forward,” Hepburn-Brown said.

The board has approved an interim dividend payment of A$0.05 per share.

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