TIDMMML
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
MEDUSA RECORDS STRONG 2009 FINANCIAL RESULTS
Medusa Mining Limited ("Medusa" or the "Company"), is pleased to
present its full year financial results for the year ended 30 June
2009, highlighted by a record Net Profit After Tax ("NPAT") of $38.1
million.
Highlights:
* Record Net Profit of 38.1 million (2008: ($1.3 million))
* Turnover increased 216% to $57.3 million
* Earnings per share $0.25 (2008:$0.009)
* Total Co-O mine resource increased 60% to 1.38 million ounces of
gold
* Maiden resource of 650,000 ounces of gold at its Bananghililg
Deposit
Managing Director, Geoff Davis commented:
"The year has been one of tremendous advance with gold production
from the Co-O Mine now annualised at June 30 at over 60,000 ounces
per annum, following production of 47,869 ounces at a cash cost of
US$213 per ounce for the year, making Medusa one of the lowest cost
gold producers on the ASX and AIM markets. Work is progressing on
schedule to attain 100,000 ounces of annualised production in early
2010.
Capital works are continuing and are expected to be completed by the
end of the year, enabling the Company to concentrate on production of
gold. The main outstanding item is the completion of the mill
crushing circuit expansion to treat up to approximately 1,000 tonnes
of ore per day.
Exploration expenditure has increased during the year with the
addition of more surface rigs, now totalling 12. As over 1,100,000
ounces have been added to the Company's resource inventory since last
year's annual report, this amount of effort has produced great
results, and further increases are anticipated.
The recent announcement of a maiden resource at Bananghilig of
650,000 ounces of gold now sets the scene for propelling the Company
to upper mid-tier status by potentially developing a second mine with
a potential total production profile of 300,000 to 400,000 ounces of
gold per year.
The Bananghilig Deposit further strengthens the Company's belief in
the enormous prospectivity of its substantial tenement package.
Financially the Company is in a sound position with just under $33
million in the bank and this year's EBITDA of A$40.6 million sets the
scene of what we believe will be strong future earnings growth."
For further information, please contact:
Medusa Mining Limited +61 8 9367 0601
Geoffrey Davis, Managing Director
Roy Daniel, Finance Director
Fairfax I.S. PLC +44 (0)20 7598 5368
(Nominated Adviser/Joint Broker)
Ewan Leggat
Mirabaud Securities Limited +44 (0)20 7321 2508
(Joint Broker)
Peter Krens
Lothbury Financial +44 (0)20 7011 9411
Michael Padley/Libby Moss
Managing Director's Review
Achievement of our production targets ahead of schedule during the
past year has triggered the desire to look back to where we have come
from since becoming fully involved in the Co-O Gold Project in
December 2006.
At that point the Co-O Mine had a resource of 267,000 ounces. The
production target was a modest 40,000 ounces per year, but
exploration was starting to indicate we had a growing giant on our
hands. In the next resource update in September 2007, it had grown to
713,000 ounces, in August 2008 to 862,000 and in June this year to
1,380,000 ounces, and this figure is expected to continue growing.
With potentially a long mine life and production now heading rapidly
to 100,000 ounces per year from the first quarter of 2010, and
exploration in progress to potentially justify a further expansion,
the Company is set to enter the realms of a mid-tier gold producer.
On a world basis, the Co-O Mine is producing gold as one of the
lowest cost producers. We see no reason for this to change in the
foreseeable future which cements the Company's position in the gold
industry as a low cost producer.
While exploration has rightly focused on the Co-O Mine to fully
establish cash flow, the Company now has the 650,000 ounce
Bananghilig Deposit to provide the potential for a second producing
mine. The size of the deposit (which is anticipated to grow with
further exploration), has the potential to add another 200,000 ounces
of annualised production. The deposit is low grade, but has a number
of redeeming features which are anticipated, with further work, to
translate into a medium-cost producer.
Copper exploration is also advancing at the Lingig copper project
where drilling during the year returned encouraging intersections
over good widths. Provided drilling continues to outline a body that
has commercial size potential, it is anticipated that the pace of
work will pick up as results justify it.
Encouraging scout drilling results were also obtained from the
Kamarangan copper project during the year, justifying further
drilling.
A number of visitors and consultants to the Co-O Project during the
year have observed and commented that the project is noticeably
intimately integrated in our host communities. This is an observation
of which our community relations people are intensely proud, not only
from the perspective of personal achievement, but more importantly
from the perspective of the Company's ability to provide tangible
benefits to our host communities, raising the aspirations of, in
particular, younger members of those communities through education,
health, agriculture and for many of them, secure work at a
potentially long life project.
The Co-O Project today is the result of a dedicated team effort at
all levels of the organisation. At times during our infancy it was
difficult to see the light at the end of the tunnel, but to
everyone's credit, the sense of ownership and enthusiasm now present
at all levels is something of which I am immensely proud.
We all look forward to progressing the Company to 300,000 to 400,000
ounce gold producer which will significantly elevate the status of
the Philippines as a gold producer and provide employment and other
benefits to a large number of people.
Geoff Davis
Managing Director
HIGHLIGHTS OF THE FINANCIAL YEAR
FINANCIALS
+----------------------------------------------------------------+
| Key Results | 30 June 2009 | 30 June 2008 | Variance | (%) |
|-------------+--------------+--------------+-------------+------|
| Revenues | $57,257,750 | $18,074,035 | $39,183,715 | 216% |
|-------------+--------------+--------------+-------------+------|
| EBITDA | $40,608,840 | $4,655,085 | $35,953,755 | - |
|-------------+--------------+--------------+-------------+------|
| EBIT | $35,819,516 | $1,018,439 | $34,801,077 | - |
|-------------+--------------+--------------+-------------+------|
| NPAT | $38,110,876 | ($1,347,489) | $39,458,365 | - |
|-------------+--------------+--------------+-------------+------|
| EPS (basic) | $0.25 | ($0.009) | $0.259 | - |
+----------------------------------------------------------------+
* Record Net Profit After Tax ("NPAT") of $38.1 million (2008:
($1.3 million)), representing basic earnings per share ("EPS"),
of 25 cents on a weighted average basis;
* Revenues increased 216% to a record $57.3 million, due to
increased gold production and a higher price received on sales.
Medusa is an un-hedged gold producer and received an average gold
price of US$880 per ounce from the sale of 47,869 ounces of gold
for the year (2008: 19,009 ounces at US$849 per ounce);
* Earnings Before Interest, Tax, Depreciation and Amortisation
("EBITDA") of $40.6 million (2008: $4.7 million) and Earnings
Before Interest and Tax ("EBIT") of $35.8 million (2008: $1.0
million);
* Mindanao Mineral Processing and Refining Corporation, Medusa's
wholly owned Philippines subsidiary was granted a four year tax
concession, commencing July 2009;
* The Company is debt free and had a cash balance of $32.9 million
at year end.
OPERATIONS
Co-O MINE
* The Company produced a record 47,869 ounces of gold for the year,
an increase of 28,860 ounces or 152 % from the previous year's
production of 19,009 ounces, at an average grade of 13.30 g/t
gold (2008: 10.40 g/t gold) and cash costs of US$213 per ounce
(2008: US$248 per ounce) as seen in figure 1 (please see the link
at the end of this announcement)
* With Phase 1 of its expansion programme completed ahead of
schedule in the June 2009 quarter and the Phase II expansion
programme on schedule, the Company expects to produce
approximately 82,000 ounces in the forthcoming fiscal year at an
estimated cash cost of US$200 per ounce
RESERVES AND RESOURCES
+---------------------------------------------------------+
| Type | June 2009 | June 2008 | Variance |
|----------------------+-----------+-----------+----------|
| Co-O Reserves | | | |
|----------------------+-----------+-----------+----------|
| Probable reserves | 500,000 | 249,000 | 101% |
|----------------------+-----------+-----------+----------|
| Total Co-O Reserves | 500,000 | 249,000 | 101% |
|----------------------+-----------+-----------+----------|
| Co-O Resources | | | |
|----------------------+-----------+-----------+----------|
| Indicated resources | 603,000 | 392,000 | 54% |
|----------------------+-----------+-----------+----------|
| Inferred resources | 777,000 | 470,000 | 65% |
|----------------------+-----------+-----------+----------|
| Total Co-O Resources | 1,380,000 | 862,000 | 60% |
+---------------------------------------------------------+
* Gold reserves at Co-O increased by 251,000 ounces or 101 % to
500,000 ounces excluding mine depletion for the year of 47,869
ounces;
* Co-O's gold resource inventory at year end of 1,380,000 contained
ounces represents an increase of 518,000 ounces or 60% and
excludes any mine depletion for the year as seen in figure 2
(please see the link at the end of this announcement)
* Subsequent to year end, Medusa announced a maiden resource of
650,000 ounces at its Banaghilig Deposit (15 million tonnes at
1.3 g/t gold);
* Together with Co-O's resource of 1.38 million, the Company's
total resource inventory now stands at 2.03 million.
EXPLORATION
* Contiguous tenement package maintained at >800km2;
* Budgeted exploration for 2009/10 of $17.0 million (2008 actual:
$15 million);
* Exploration highlights at Co-O include:
* Discovery of new high grade veins, such as the Great Hamish Vein;
* Extension along strike to approximately 1,400 metres;
* Extension across strike to approximately 500 metres; and
* Demonstrating that mineralisation extends to over 400 metres
below the mine's adit entrance; as seen in figure 3 (please see
the link at the end of this announcement).
* At the Bananghilig disseminated gold deposit, a very large
mineralised system has now been estimated in preparation for
planning additional work;
* At the Lingig copper prospect, drilling is on-going to define an
economic sized resource following initial good results;
* Scout drilling at the Kamarangan copper prospect returned
encouraging results requiring follow-up drilling.
INCOME STATEMENTS
for the year ended 30 June 2009
Consolidated Company
2009 2008 2009 2008
$ $ $ $
Revenue 57,252,098 18,074,035 1,651,506 1,819,183
Other income 5,652 - - -
Cost of sales (17,339,343) (10,066,585) - -
Exploration & evaluation expenses (80,735) (572,221) - -
Finance Costs - (375,842) - -
Administration expenses (2,351,838) (3,307,302) (1,787,601) (1,578,609)
Other expenses (1,666,318) (2,733,646) (1,024,872) (2,437,571)
Profit/(loss) before income
tax expense 35,819,516 1,018,439 (1,160,967) (2,196,997)
Income tax (expense)/income 2,291,360 (2,365,928) - -
Profit/(loss) attributable to
members of the Company 38,110,876 (1,347,489) (1,160,967) (2,196,997)
Basic earnings/(loss) per share $0.250 ($0.009)
Diluted earnings/(loss) per share $0.249 ($0.009)
The accompanying notes form part of these financial statements.
BALANCE SHEETS
as at 30 June 2009
Consolidated Company
2009 2008 2009 2008
$ $ $ $
CURRENT ASSETS
Cash & cash
equivalents 32,938,971 4,834,161 17,662,620 2,242,620
Trade & other
receivables 6,198,161 2,185,194 23,914 27,425
Inventories 1,446,171 935,976 - -
Other current assets 159,595 333,119 48,102 29,484
Total Current Assets 40,742,898 8,288,450 17,734,636 2,299,529
Non-Current Assets
Property, plant &
equipment 37,818,693 28,499,551 45,438 60,481
Exploration,
evaluation and
development
expenditure 65,797,441 40,740,193 - -
Deferred tax assets 85,989 2,851,792 - -
Other assets - - 66,169,494 56,143,200
Total Non-Current
Assets 103,702,123 72,091,536 66,214,932 56,203,681
Total Assets 144,445,021 80,379,986 83,949,568 58,503,210
Current Liabilities
Trade & other
payables 11,423,616 6,845,501 568,549 1,217,702
Total Current
Liabilities 11,423,616 6,845,501 568,549 1,217,702
NON-CURRENT
LIABILITIES
Deferred tax
liability 388,879 5,217,720 - -
Total Non-Current
Liabilities 388,879 5,217,720 - -
Total Liabilities 11,812,495 12,063,221 568,549 1,217,702
Net Assets 132,632,526 68,316,765 83,381,019 57,285,508
Equity
Issued capital 92,773,702 65,866,550 92,773,702 65,866,550
Reserves (1,231,604) (529,337) 2,072,018 1,722,692
Retained profits /
(accumulated losses) 41,090,428 2,979,552 (11,464,701) (10,303,734)
Total equity 132,632,526 68,316,765 83,381,019 57,285,508
The accompanying notes form part of these financial statements.
STATEMENTS OF CHANGES IN EQUITY
for the year ended 30 June 2009
Foreign
Share Currency
Capital Accumulated Option Translation
Ordinary Losses Reserve Reserve Total$
$ $ $ $ $
CONSOLIDATED
Balance at
01.07.2007 63,805,000 4,327,041 1,544,961 793,287 70,470,289
Exchange
differences
arising on
translation - - - (3,045,316) (3,045,316)
(Loss)
attributable
to members
of Company - (1,347,489) - - (1,347,489)
Total
recognised
income and
expenses
during the
year - (1,347,489) - (3,045,316) 4,392,805
Shares
issued
during the
period 1,742,200 - - - 1,742,200
Share
transaction
costs (674,750) - - - (674,750)
Share
options
issued
during the
period in
accordance
with AASB 2
- share
based
payment - - 1,171,831 - 1,171,831
Transfer
from option
reserve 994,100 - (994,100) - -
Balance at
30.06.2008 65,866,550 2,979,552 1,722,692 (2,252,029) 68,316,765
Exchange
differences
arising on
translation - - - (1,051,593) (1,051,593)
Profit
attributable
to members
of Company - 38,110,876 - - 38,110,876
Total
recognised
income and
expenses
during the
year - 38,110,876 - (1,051,593) 37,059,283
Shares
issued
during the
period 28,208,841 - - - 28,208,841
Share
transaction
costs (1,301,689) - - - (1,301,689)
Share
options
issued
during the
period in
accordance
with AASB 2
-
share based
payment - - 349,326 - 349,326
Balance at
30.06.2009 92,773,702 41,090,428 2,072,018 (3,303,622) 132,632,526
COMPANY
Balance at
01.07.2007 63,805,000 (8,106,737) 1,544,961 - 57,243,224
Loss
attributable
to members
of Company - (2,196,997) - - (2,196,997)
Total
recognised
income and
expenses
during the
year - (2,196,997) - - (2,196,997)
Shares
issued
during the
period 1,742,200 - - - 1,742,200
Share
transaction
costs (674,750) - - - (674,750)
Share
options
issued
during the
period in
accordance
with AASB 2
-
share based
payment - - 1,171,831 - 1,171,831
Transfer
from option
reserve 994,100 - (994,100) - -
Balance at
30.06.2008 65,866,550 (10,303,734) 1,722,692 - 57,285,508
Loss
attributable
to members
of Company - (1,160,967) - - (1,160,967)
Total
recognised
income and
expenses
during the
year - (1,160,967) - - (1,160,967)
Shares
issued
during the
period 28,208,841 - - - 28,208,841
Share
transaction
costs (1,301,689) - - - (1,301,689)
Share
options
issued
during the
period in
accordance
with AASB 2
-
share based
payment - - 349,326 - 349,326
Balance at
30.06.2009 92,773,702 (11,464,701) 2,072,018 - 83,381,019
The accompanying notes form part of these financial statements.
CASH FLOW STATEMENTS
for the year ended 30 June 2009
Consolidated Company
2009 2008 2009 2008
$ $ $ $
CASH FLOWS FROM
OPERATING ACTIVITIES
Receipts from
customers 57,019,136 17,540,189 - 805
Payments to suppliers
and employees (17,532,970) (10,738,999) (3,190,999) (2,708,082)
Interest received 232,963 399,085 212,768 389,073
Net cash provided
by/(used in) operating
activities 39,719,129 7,200,275 (2,978,231) (2,318,204)
CASH FLOWS FROM
INVESTING ACTIVITIES
Receipt from sale of
investments - 110,119 - 110,119
Payments for plant and
equipment (8,379,429) (2,313,575) (6,012) (17,508)
Payments for exploration
and evaluation
activities (4,178,100) (8,293,728) - -
Payment for
development activities (23,187,857) (6,546,801) - -
Loans to controlled
entities - - (8,409,904) (9,621,057)
Net cash (used in)
investing activities (35,745,386) (17,043,985) (8,415,916) (9,528,446)
CASH FLOWS FROM
FINANCING ACTIVITIES
Proceeds from issue of
shares 28,143,000 1,742,200 28,143,000 1,742,200
Transaction costs from
issue of shares (1,301,673) (1,811,250) (1,301,673) (1,811,250)
Repayment of vendor
finance - (5,000,000) - (5,000,000)
Net cash provided
by/(used in) financing
activities 26,841,327 (5,069,050) 26,841,327 (5,069,050)
Net
(decrease)/increase in
cash and
cash equivalents held 30,815,070 (14,912,760) 15,447,180 (16,915,700)
Cash and cash
equivalents at the
beginning of the
financial year 4,834,161 20,168,063 2,242,620 19,166,563
Exchange rate
adjustment (2,710,260) (421,142) (27,180) (8,243)
Cash and cash
equivalents at the end
of the financial year 32,938,971 4,834,161 17,662,620 2,242,620
The accompanying notes form part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2009
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The financial report is a general purpose financial report which has
been prepared in accordance with Australian Accounting Standards,
including Australian Accounting Interpretations, other authoritative
pronouncements of the Australian Accounting Standards Board and the
Corporations Act 2001.
Australian Accounting Standards set out accounting policies that the
AASB has concluded would result in a financial report containing
relevant and reliable information about transactions, events and
conditions to which they apply. Compliance with Australian Accounting
Standards ensures that the financial statements and notes also comply
with International Financial Reporting Standards. Material
accounting policies adopted in the preparation of this financial
report are presented below. They have been consistently applied
unless otherwise stated.
The financial report covers the Group of Medusa Mining Limited
("Medusa") and controlled entities, and Medusa as an individual
Company. Medusa is a listed public company, incorporated and
domiciled in Australia.
The financial statements were authorised for issue by the Directors
on 4 September 2009.
Basis of Preparation
Reporting Basis and Conventions
The financial report has been prepared on an accruals basis and is
based on historical costs modified by the revaluation of selected
non-current assets, financial assets and financial liabilities for
which the fair value basis of accounting has been applied.
(a) Principles of Consolidation
A controlled entity is any entity over which Medusa has the power to
govern the financial and operating policies so as to obtain benefits
from its activities. In assessing the power to govern, the existence
and effect of holdings of actual and potential voting rights are
considered.
A list of controlled entities is contained in Note 19 to the
financial statements.
As at reporting date, the assets and liabilities of all controlled
entities have been incorporated into the consolidated financial
statements as well as their results for the year then ended. Where
controlled entities have entered (left) the consolidated group during
the year, their operating results have been included (excluded) from
the date control was obtained (ceased).
All inter-group balances and transactions between entities in the
consolidated group, including any unrealised profits or losses, have
been eliminated on consolidation. Accounting policies of subsidiaries
have been changed where necessary to ensure consistency with those
adopted by the parent entity
Comparative Figures
Where required by Accounting Standards, comparative figures have been
adjusted to conform with changes in presentation for the current
financial year.
(b) Revenue Recognition
Revenue is measured at the fair value of the consideration received
or receivable after taking into account any trade discounts and
volume rebates allowed. Any consideration deferred is treated as the
provision of finance and is discounted at a rate of interest that is
generally accepted in the market for similar arrangements. The
difference between the amount initially recognised and the amount
ultimately received is interest revenue.
Gold and Silver Sales
Revenue from the production of gold and silver is recognised when the
Group has passed control and risk to the buyer.
Interest Revenue
Interest revenue is recognised using the effective interest rate
method, which, for floating rate financial assets, is the rate
inherent in the instrument.
Dividends
Dividend revenue (net of franking credits) is recognised when the
right to receive a dividend has been established.
Dividends received from associates and joint venture entities are
accounted for in accordance with the equity method of accounting and
recognised when the dividends are received.
All revenue is stated net of the amount of goods and services tax
("GST").
(c) Income Tax
The income tax expense (revenue) for the year comprises current
income tax expense (income) and deferred tax expense (income).
EARNINGS/(LOSS) PER SHARE
Consolidated
2009 2008
$ $
Earnings used to calculate basic
and diluted EPS 38,110,876 (1,347,489)
Weighted average number of ordinary
shares used in the calculation of the
basic earnings per share. 152,723,201 43,626,534
Weighted average unlisted options
on issue 479,874
Weighted average of ordinary shares
diluted as at 30 June 2009 153,203,075
Diluted earnings per share was not calculated for the year ended 30
June 2008 as the result was anti-dilutive in nature.
The annual report and accounts for the year ended 30 June 2009 will
be sent to shareholders by electronic means (or by post to those
shareholders who have specifically requested a hard copy of the
annual report) shortly and a copy will be available on the Company's
website thereafter - www.medusamining.com.au.
ABOUT MEDUSA MINING LIMITED
Medusa Mining Limited ("Medusa" or the "Company"), a public company
listed on the ASX and AIM, is an Australian based gold producer,
focussed solely on the Philippines.
With total current resources of over 2,000,000 ounces of gold, Medusa
aims to become a 300,000 to 400,000 ounce per year, low cost gold
producer. The Company is currently expanding its high grade Co-O Mine
operations (1,380,000 ounces at 10.8 g/t gold) to increase it
production capacity to 100,000 ounces per year, and is conducting
near mine exploration to assess the possibilities of further
expansion to 200,000 ounces per year. Current cash costs at the Co-O
Mine are approximately US$200 per ounce.
A pipe-line of deposits is now being established with the
Bananghilig Deposit (650,000 ounces at 1.3 g/t gold) which is
expected to expand, potentially in conjunction with new nearby
discoveries.
Further potential upside exists in the discovery of substantial
copper deposits within the tenement holding of > 800km2.
+---+
| |
+---+
JORC COMPLIANCE - CONSENT OF COMPETENT PERSONS
Cube Consulting Pty Ltd
Information in this report relating to Mineral Resources has
been estimated and complied by Mark Zammit of Cube Consulting Pty
Ltd. Mr Zammit is a member of The Australasian Institute of Mining &
Metallurgy and has sufficient experience that is relevant to the
style of mineralisation and type of deposit under consideration and
to the activity which he is undertaking to qualify as a Competent
Person as defined in the 2004 Edition of the "Australian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves". Mr Zammit consents to the inclusion in the report of the
matters based on his information in the form and context in which it
appears.
Cube Consulting is an independent Perth based resource industry
consulting firm specialising in geological modelling, resource
estimation and information technology.
Crosscut Consulting
Information in this report that relates to Ore Reserves is based on
information compiled by Declan Franzmann, B Eng (Mining), MAusIMM.
Mr Franzmann is a full-time employee of Crosscut Consulting.
Mr Franzman has sufficient experience which is relevant to the style
of mineralisation and type of deposit under consideration and to the
activity which they are undertaking to qualify as Competent Persons
as defined in the 2004 Edition of the "Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves". Mr Franzmann consents to the inclusion in the report of
the matters based on his information in the form and context in which
it appears.
DISCLAIMER
This announcement contains 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.
=--END OF MESSAGE---
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