News

April 14, 2008

Medusa Will Be Back On Track By The Third Quarter Of This Year

By Our Man in The City

For a junior mining company, having to repeatedly answer one’s critics because of operational hiccups is a laborious task. In the case of Medusa Mining, weak production from its Co-O gold mine has caused investor, analyst and media criticism over the ongoing set-backs. There have also been various disagreements with joint venture partner Bunawun Resources regarding another property. The high expectation surrounding Medusa’s assets means that the slightest deviation away from development plans is immediately noticed by the market. Managing director Geoff Davis’ strategy is to be totally transparent on the latest state of affairs, in an attempt to reassure about the group’s position in the Philippines. The third quarter of 2008, he insists, will be the turning point for Medusa in getting back on track and significantly improving production, after what will have been more than a year’s delay. Miss this target and Mr Davis may find that his audience is no longer forgiving.

Medusa’s problems started in early 2007 when a landslide blocked Co-O. The company then blamed local government elections and a reorganisation of its workers for missing production targets. Just as life was returning to normal, the next phase of problems began. In October, illness among the company’s employees slowed down mine development and held back gold output still further. Mr Davis acknowledges these issues but now says the company purposely capped production. “Exploration last year...