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NEWS

Consistency the

key at Co-O

by Michael Washbourne

hen David McGowan joined Medusa Mining Ltd almost
Wthree years ago, the company was scratching around for
infrastructure to ensure its Co-O operations in the Philippines
would continue producing for another quarter.
Fast-forward to today and Medusa is now making arrangements
for several years down the track, completing a remarkable
turnaround which has caught the attention of institutional
investors from Australia, Europe and Asia.
“A couple of years ago we embarked on a path to gain
consistency and gain control of the operation and the last 12
months we have demonstrated that,” McGowan told GMJ.
Medusa exceeded its production guidance in FY2019
“I suppose the pleasing thing is all of this was reasonably
predictable the whole way through. We followed our plan and
it came to fruition. The difference between the plan nowadays Consistent production from the Co-O mine over the past
and what it was 2-3 years ago is that it’s a lot more long-term and year has been underpinned by the E15 service shaft being in
we have a much better idea of how to best use our resources to operation for all of that period. Ore production is up almost 15%
gain the best from our mineral resource. since E15 was commissioned in November 2018.
“We’re putting infrastructure in now for production in a couple With E15 now transporting mineworkers between levels with
of years’ time, whereas 2-3 years ago we were running hard far greater ease and comfort, the outdated L8 shaft is used
trying to put in infrastructure to maintain what we already had. exclusively to hoist ore and waste from the underground.
Now we’re actually able to look forward, we’re able to see “It has also given us some benefits which have led to greater
what we need in a couple of years’ time and start putting that conversations between our people during the day and improving
infrastructure in.” our planning significantly,” McGowan said.
FY2019 was Medusa’s best reporting year for some time with “Previously, people would go down the L8 shaft, they would
the 103,307oz produced from Co-O exceeding the upper end go down to a level and they were basically stuck on that level
of guidance. Costs were also improved and a statuary after- until the end of the shift. Now one of the things we’re seeing
tax profit of $US36.5 million was posted just 12 months after is people come up at crib time and have conversations with
recording a loss of $US55.6 million. their peers about ‘what are you doing on the level above’,
Medusa kicked off FY2020 on the best possible note by churning ‘can I borrow some equipment’, ‘can I do this’, ‘have you seen
out 27,515oz for the September quarter, putting the company on this on this level’, all those sorts of things, and they’re actually
course to meet its stated guidance of 95,000-105,000oz at an tweaking plans by having those conversations. Without those
AISC of $US1,025-1,125/oz. conversations, some of the improvements probably wouldn’t be
there.”
McGowan, who was formally elevated to the chief executive’s
chair in March 2019, said maintaining consistent production Medusa recently opted out of an earn-in agreement over two
from quarter to quarter was something all Medusa shareholders gold projects in Central Queensland which failed to deliver
should expect from the years to come. the exploration results it had been hoping for. However, the
company remains on the lookout for other assets in Australia
“To be able to say you’re consistent you have to do it over a
and the broader Asia-Pacific region.
number of quarters, you can’t just hit the mark on one quarter
and say you’re now consistent,” he said. Exploration will continue in the Philippines with Medusa
confident the Royal Crowne Vein project, only 3km from the
“Historically the company had a habit of shooting itself in the
Co-O mill, will soon become a satellite operation and generate
foot; having a really good year followed by a really bad year.
extra cash for the business.
The previous year was a good year, this year has been a better
year and it should be expected that this is what we’re going to Medusa also recently received a Presidential Award for Safety
continue doing moving forward.” and Environment for its Co-O processing plant.

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