TIDMMML
RNS Number : 9732K
Medusa Mining Limited
29 August 2012
Medusa Mining Limited
Annual Report and Financial Statements
29 August 2012
Medusa Mining Limited ("Medusa" or the "Company") advises that
its annual report and financial statements for the year ended 30
June 2012 has been published. The document can be accessed through
the link at the end of this announcement and is available on the
Company's website (www.medusamining.com.au).
A copy of this report has been filed with the National Storage
Mechanism and will be available for inspection shortly at
www.hemscott.com/nsm.do.
HIGHLIGHTS OF THE FINANCIAL YEAR
Medusa presents its full year financial results for the year
ended 30 June 2012, with a Net Profit After Tax of US$49.2
million.
Financials
-- Revenues of US$81.2 million compared to US$149.6 million for
the previous year, due to a decrease in gold production as a result
of accelerated development at the mine to prepare for future
production increase, limited shaft haulage capacity and reduced
availability of the milling circuit due to adverse weather
conditions on two separate occasions.
-- Medusa is an un-hedged gold producer and received an average
gold price of US$1,658 per ounce from the sale of 55,446 ounces of
gold for the year (2011: 96,217 ounces at US$1,371 per ounce);
-- Earnings before interest, tax, depreciation and amortisation
("EBITDA") of US$58.0 million, (US$120.7 million in the previous
year);
-- Basic earnings per share ("EPS") of US$0.261 on a weighted
average basis, based on NPAT of US$49.2 million (2011: EPS of
US$0.587 based on NPAT of US$110.4 million);
-- The Company remains debt free and had total cash, cash
equivalent in gold on metal account and bullion on hand of US$51.8
million at year end (2011: US$102.1 million);
-- Medusa paid un-franked dividends (in two equal instalments)
totalling A$0.10 per share during the year.
Description Unit 30 June 30 June Variance (%)
2012 2011
------------- ------ ---------- ----------- ------------ ------
Revenues US$ US$81.2M US$149.6M (US$68.4M) (46%)
------------- ------ ---------- ----------- ------------ ------
EBITDA US$ US$58.0M US$120.7M (US$62.7M) (52%)
------------- ------ ---------- ----------- ------------ ------
NPAT US$ US$49.2M US$110.4M (US$61.2M) (55%)
------------- ------ ---------- ----------- ------------ ------
EPS (basic) US$ US$0.261 US$0.587 (US$0.326) (56%)
------------- ------ ---------- ----------- ------------ ------
Dividend A$ A$0.10 A$0.10 - -
paid
------------- ------ ---------- ----------- ------------ ------
Operations
Description Unit 30 June 30 June
2012 2011
------------------ --------- -------- ---------
Tonnes mined WMT 274,185 262,610
------------------ --------- -------- ---------
Ore milled DMT 253,138 266,613
------------------ --------- -------- ---------
Recovered grade gpt 8.10 12.63
------------------ --------- -------- ---------
Recovery % 92% 94%
------------------ --------- -------- ---------
Gold produced ounces 60,595 101,474
------------------ --------- -------- ---------
Cash costs
(1) US$/oz $261 $189
------------------ --------- -------- ---------
(1) Net of development costs and includes
royalties and local business taxes
but no by-product credits
--------------------------------------------------
-- The Company produced 60,595 ounces of gold for the year,
compared to the previous year's production of 101,474 ounces, at an
average recovered grade of 8.10 g/t gold (2011: 12.63 g/t
gold);
-- The average cash cost for the year of US$261 per ounce, was
higher than the previous year's average cash costs of US$189 per
ounce due primarily to reduced ounces produced.
Production Guidance
-- The production guidance for the forthcoming year is between
100,000 to 120,000 ounces at cash costs of around US$210 per ounce.
There is currently a heavy emphasis on mine development to prepare
the Co-O Mine for future production increase.
-- Subsequent to year end, on 22 August, the Company reported
that fire had caused damage to the Baguio Shaft, putting it out of
action temporarily for approximately three months. To offset the
anticipated loss in production from the Baguio Shaft and maintain
the stated production guidance for 2012/13, the Company has
commenced processing stockpiles of settling pond fines.
-- Preliminary estimates for repairs and re-furbishment of the
Baguio Shaft is approximately US$500,000. The Company is also in
discussions with its insurers regarding the incident and lost
production from the shaft.
Reserves and Resources
Co-O Reserves Jun Jun Variance
2012 2011
---------------- ---------- ---------- ---------
Probable
reserves 568,000 502,000 66,000
---------------- ---------- ---------- ---------
Co-O Resources Jun Jun Variance
2012 2011
---------------- ---------- ---------- ---------
Indicated
resources 715,000 616,000 99,000
---------------- ---------- ---------- ---------
Inferred
resources 1,304,000 1,344,000 (40,000)
---------------- ---------- ---------- ---------
Bananghilig Jun Jun Variance
Resources 2012 2011
---------------- ---------- ---------- ---------
Inferred
resources 1,100,000 650,000 450,000
---------------- ---------- ---------- ---------
-- Gold reserves at Co-O increased to 568,000 ounces
representing an increase of 66,000 ounces;
-- Co-O's gold resources comprised of 715,000 indicated and
1,304,000 inferred resource ounces, representing an increase of
99,000 and decrease of 40,000 ounces within the indicated and
inferred categories respectively.
-- Bananghilig's inferred resources increased by 69% to 1,100,000 ounces
Exploration
-- Contiguous tenement package maintained at >800km2;
-- Budgeted exploration for fiscal year 2013 of US$25.0 million
(2012 actual: US$35.1 million);
-- Exploration highlights at Co-O include:
o the global resources passes 2 million ounces and is still open
at depth, to the east, north and to the west beyond the Tinago
Fault;
o discovery of extensions to the west of the Tinago Fault;
o extension along strike to the east by 400 metres to
approximately 2 kilometres;
o demonstrating that mineralisation extends to at least 1
kilometre below the mine's adit entrance; and
o the Conceptual Exploration Target ** for the Co-O Mine of
between 3 and 7 million ounces of gold continues to be validated
with global resources and mined ounces now totalling in excess of
2.5 million ounces;
o ** The potential target size and grade of the Co-O Mine is
conceptual in nature and there has been insufficient exploration to
define a mineral resource. It is also uncertain if further
exploration will result in the target being defined as a mineral
resource.
-- At the Bananghilig disseminated gold deposit, drilling has
confirmed more than 1 million ounces of Inferred Resources which is
being converted to Indicated Resources to form the basis for pit
optimisation and feasibility studies;
-- At Saugon, re-drilling of the First Hit Vein has produced
encouraging results with the mineralisation possibly open at depth;
and
-- Induced Polarisation and ground magnetics geophysical
programme have been completed over the Tambis intrusive-breccia
complex, Kamarangan, Usa, Saugon and is almost complete at Lingig.
Surveying is in progress for the same geophysical programme for the
Co-O area.
New Co-O Mill
In November 2010, the Board approved the construction of a new
plant with capacity to produce 200,000 ounces of gold per year
based on processing up to 750,000 tonnes per year. The Capex was
subsequently estimated at approximately US$70M for the new mill and
mine expansion.
The Environmental Clearance Certificate for 2,500 tonnes per day
for the new mill is in progress.
The current status of activities is:
-- Priority was given to the returning the tilting leach tanks
back into service which has been achieved;
-- Construction of the new large leach tank should be completed by mid-August;
-- Foundations for the new crushing and grinding sections are advancing on schedule;
-- The de-toxification unit foundations are completed and form work is on schedule;
-- Approximately 50% of the SAG mill components have been delivered;
The new electrical supply systems to the mine and mill are
advanced and the last stage will be completed when the mine is
re-wired through the Saga Shaft.
Preliminary Development Timetable
Please see the link at the end of this announcement to view the
full annual report and financial statements which contains the
Preliminary Development timetable on page 6.
Dividend
The Company declared a final un-franked dividend payment of
A$0.02 per share payable to shareholders on 4 October 2012.
The relevant dates for the final dividend are as follows:
Dividend Record Date : 14 September
2012
Ex-Dividend Date : 10 September
(ASX purposes) 2012
Ex-Dividend Date : 12 September
(LSE purposes) 2012
Dividend Payment : 4 October
Date 2012
There is no foreign conduit income attributed to the
dividend.
The Board considers it prudent to temporary reduce dividends
from A$0.05 per share to A$0.02 per share until production levels
increase at the Co-O Mine, so as to maintain a positive cash
balance as it nears completion of the Co-O mill/mine expansion and
also the need for additional CAPEX for upgrading/replacing existing
infrastructure including new administration and accommodation
buildings, new surface fleet maintenance workshops, new core farm
and an exploration only laboratory.
The Board wishes to add that until such time as the Saga Shaft
is completed towards the end of calendar year 2012, production
levels will continue to be flat as the Company strives to balance
production with development, as a direct consequence of limited
haulage capacity.
In addition, the Company has also reviewed all its discretionary
related expenditures and has decided to re-prioritise its
exploration activities, by reducing the number of drlling rigs to
14 for the current financial year, most of which will continue to
be active at Co-O. In the past, the Company's main focus was on
exploration drilling, deploying up to 22 drilling rigs, at any one
time.
Peter Hepburn-Brown, Managing Director of Medusa, commented:
"We all recognise that the last financial year has indeed been
challenging as we sought to balance production and development and
that the year's results have also been adversely impacted by two
weather events beyond our control.
The 2012-13 year will be one of consolidation as we build on the
previous year's hard work. However our focus has not changed, and
that has been to complete the Saga Shaft on schedule in the
December 2012 quarter. This will be a game changer for the Company
as we commence the task of opening up Level 8 at 350 metres below
surface.
We are also very aware of maintaining a strong positive cash
balance as we complete the Co-O Mine and Mill expansion. The
decision to temporarily reduce dividends was extremely difficult
but prudent nevertheless, and we expect that once the expansion
activities are completed and production improves, we will be in a
position to increase dividends".
Contacts:
Australia
Medusa Mining Limited
Peter Hepburn-Brown, Managing
Director +61 8 9367 0601
United Kingdom
Fairfax I.S. PLC, Financial
Adviser and Broker
Ewan Leggat/Laura Littley + (0)20 7598 5368
AUDITED FINANCIAL STATEMENTS EXTRACTED FROM THE 2012 ANNUAL
REPORT
Statement of Comprehensive Income for the year ended 30 June
2012
Consolidated
2012 2011
US$000 US$000
-------- --------
Revenue 81,188 149,587
Cost of sales (20,793) (29,687)
Exploration & evaluation
expenses - (18)
Administration expenses (10,750) (4,903)
Other expenses (1,569) (4,497)
-------- --------
Profit before income tax
expense 48,076 110,482
Income tax benefit/(expense) 1,108 (127)
-------- --------
Profit attributable to
members of the Company 49,184 110,355
-------- --------
Other comprehensive income,
net of income tax:
Exchange differences on
translation of foreign
operations and other comprehensive
income for the year 6,830 8,146
-------- --------
Total comprehensive income
for the year 56,014 118,501
-------- --------
Overall operations:
Basic earnings per share
(US$ per share) 0.261 0.587
-------- --------
Diluted earnings per share
(US$ per share) 0.260 0.585
-------- --------
Statement of Financial Position as at 30 June 2012
Consolidated
2012 2011
US$000 US$000
------- -------
CURRENT ASSETS
Cash & cash equivalents 12,468 62,431
Trade & other receivables 55,964 57,112
Inventories 14,643 8,136
Other current assets 707 509
Total Current Assets 83,782 128,188
------- -------
Non-Current Assets
Property, plant & equipment 63,929 40,008
Exploration, evaluation &
development expenditure 182,897 116,382
Deferred tax assets 1,632 78
Total Non-Current Assets 248,458 156,468
------- -------
Total Assets 332,240 284,656
------- -------
Current Liabilities
Trade & other payables 14,876 7,704
Provisions 920 567
------- -------
Total Current Liabilities 15,796 8,271
------- -------
NON-CURRENT LIABILITIES
Deferred tax liability 257 257
Provisions 520 239
------- -------
Total Non-Current Liabilities 777 496
------- -------
Total Liabilities 16,573 8,767
------- -------
Net Assets 315,667 275,889
------- -------
Equity
Issued capital 73,070 71,990
Reserves 23,760 14,879
Retained profits 218,837 189,020
------- -------
Total equity 315,667 275,889
------- -------
Statement of Changes in Equity for the year ended 30 June
2012
Foreign
Share Currency
Capital Retained Other Translation
Ordinary Profits Reserves Reserve Total
US$000 US$000 US$000 US$000 US$000
---------- ----------- ----------- ------------- ---------
CONSOLIDATED
Balance at 30 June 2010 70,906 97,642 1,834 5,044 175,426
---------- ----------- ----------- ------------- ---------
Comprehensive Income
Net profit after tax - 110,355 - - 110,355
Other comprehensive
income - - - 8,146 8,146
---------- ----------- ----------- ------------- ---------
Total comprehensive
income for the year - 110,355 - 8,146 118,501
---------- ----------- ----------- ------------- ---------
Transactions with owners,
in their capacity as
owners, and other transfers
Shares issued during
the period 779 - - - 779
Share options issued
during the period in
accordance with AASB
2 - share based payment - - 160 - 160
Transfer from Option
Reserve to Share Capital 305 - (305) - -
---------- ----------- ----------- ------------- ---------
Sub-total 71,990 207,997 1,689 13,190 294,866
Dividends paid or provided
for - (18,977) - - (18,977)
---------- ----------- ----------- ------------- ---------
Balance at 30 June 2011 71,990 189,020 1,689 13,190 275,889
---------- ----------- ----------- ------------- ---------
Comprehensive Income
Net profit after tax - 49,184 - - 49,184
Other comprehensive
income - - - 6,830 6,830
---------- ----------- ----------- ------------- ---------
Total comprehensive
income for the year - 49,184 - 6,830 56,014
---------- ----------- ----------- ------------- ---------
Transactions with owners,
in their capacity as
owners, and other transfers
Shares issued during
the period 789 - - - 789
Share options issued
during the period in
accordance with AASB
2 - share based payment - - 2,342 - 2,342
Transfer from Option
Reserve to Share Capital 291 - (291) - -
---------- ----------- ----------- ------------- ---------
Sub-total 73,070 238,204 3,740 20,020 335,034
Dividends paid or provided
for - (19,367) - - (19,367)
---------- ----------- ----------- ------------- ---------
Balance at 30 June 2012 73,070 218,837 3,740 20,020 315,667
---------- ----------- ----------- ------------- ---------
Statement of Cash Flows for the year ended 30 June 2012
Consolidated
2012 2011
US$000 US$000
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 92,545 131,939
Payments to suppliers & employees (30,354) (36,244)
Interest received 370 808
-------- --------
Net cash provided by operating activities 62,561 96,503
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for plant & equipment (26,353) (9,429)
Payments for exploration & evaluation activities (14,345) (11,698)
Payment for development activities (46,986) (31,127)
-------- --------
Net cash (used in) investing activities (87,684) (52,254)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares 1,079 779
Transaction costs from issue of shares - -
Payments for dividends (19,367) (18,977)
-------- --------
Net cash (used in) financing activities (18,288) (18,198)
-------- --------
Net (decrease)/increase in cash and cash equivalents
held (43,411) 26,051
Cash & cash equivalents at the beginning of the
financial year 62,431 32,457
Exchange rate adjustment (6,552) 3,923
-------- --------
Cash & cash equivalents at the end of the financial
year 12,468 62,431
-------- --------
JORC COMPLIANCE - CONSENT OF COMPETENT PERSONS
Medusa Mining Limited
Information in this report relating to Exploration Results has
been reviewed and is based on information compiled by Mr Geoff
Davis, who is a member of The Australian Institute of
Geoscientists. Mr Davis is the Managing Director of Medusa Mining
Limited and has sufficient experience which is relevant to the
style of mineralisation and type of deposits under consideration
and to the activity which he is undertaking to qualify as a
"Competent Person" as defined in the 2004 Edition of the
"Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves" and is a "Qualified Person" as defined
in "National Instrument 43-101" of the Canadian Securities
Administrators. Mr Davis 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 Pty Ltd
Information in this report relating to Mineral Resources has
been estimated and compiled by Mark Zammit of Cube Consulting Pty
Ltd of Perth, Western Australia. Mr Zammit is a member of the
Australian Institute of Geoscientists 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
"Australasian 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.
Carras Mining Pty Ltd
Information in this report relating to Ore Reserves is based on
information compiled by Dr Spero Carras, FAusIMM of Carras Mining
Pty Ltd. Dr Carras has 30 years of experience which 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
"Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves". Dr Carras 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.
The full annual report and financial statements for the year
ended 30 June 2012 are available on the Company's website
(www.medusamining.com.au) and can be accessed via the following
link:
http://www.rns-pdf.londonstockexchange.com/rns/9732K_-2012-8-29.pdf
This information is provided by RNS
The company news service from the London Stock Exchange
END
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