Como-based Medusa Mining is set to spend $80 million on the construction of a new treatment plant and associated infrastructure at its Co-O project in the Philippines.
Como-based Medusa Mining is set to spend $80 million on the construction of a new treatment plant and associated infrastructure at its Co-O project in the Philippines.
Medusa has also begun an expansion plan for its Co-O gold mine to increase its production capacity.
In a statement to the Australian Securities Exchange, Medusa said that the Co-O mine and mill currently produce 89,679 ounces of gold.
"Once fully operational, the new plant is expected to provide processing capacity to produce 200,000 ounces of gold per annum based on the current grade of the Co-O Mine's reserves," the statement said.
Medusa managing director, Geoff Davis said, "This decision heralds a new era for the Co-O Project, and demonstrates the Board's confidence in the future of its Co-O operations."
"It also confirms a measured approach to our growth strategy," he said.
See company statement below:
Medusa Mining Limited (ASX and LSE - MML; TSX - MLL) ("Medusa" or the "Company"), through its Philippines operating company Philsaga Mining Corporation is pleased to announce that the Board has approved the construction of a new Co-O treatment plant and associated infrastructure ("New Plant"). In addition, a major mine expansion/development program ("Expansion") at the Co-O Mine to increase production capacity has commenced.
For the year ended 30 June 2010, the Co-O Mine and current mill produced 89,679 ounces of gold. Once fully operational, the New Plant is expected to provide processing capacity to produce 200,000 ounces of gold per annuam based on the current grade of the Co-O Mine's reserves.
Preliminary cost estimates for the New Plant (with an initial design capacity to treat 750,000 tonnes per annum) and Expansion are expected to be approximately US$80 million and the Company intends to fund the cash requirements of the New Plant and Expansion internally.
The construction time for the New Plant after the necessary regulatory approvals are granted is estimated at between 18 to 24 months, and the full benefits of the Expansion are expected to be realised shortly thereafter.
The Company is currently in preliminary discussions with engineering groups and will provide further details in due course.
Geoff Davis, Managing Director of Medusa, commented:
"This decision heralds a new era for the Co-O Project, and demonstrates the Board's confidence in the future of its Co-O operations. It also confirms a measured approach to our growth strategy.
The drill results released on 29 October 2010 re-inforce the growth potential of the Co-O Mine and surrounding area.
It is also pleasing that the capital requirements of the New Plant and Expansion will be funded out of cashflow and that the cashflow generated from the New Plant once it is operational is intended to in turn fund the Company's next project, Bananghilig."
