Medusa Mining (MML.AX) has released its official production and cost guidance for the current financial year which ends in June 2021. The Australian company intends to produce 90-95,000 ounces of gold from its Philippines-based Co-O gold mine.
The gold will be produced at an all-in sustaining cost of $1200-1250 per ounce which is higher than the $1132/oz in FY 2020 and this increase is being blamed on the COVID-19 related increase in expenses. At the current gold price of approximately $1900/oz, Medusa Mining should still be able to generate in excess of US$60M in free cash flow from its operations (excluding taxes). At the current exchange rate, that’s approximately A$80M which makes Medusa’s current market capitalization of A$183M (and enterprise value of A$165M) quite attractive given the 330,000 ounces of gold in reserve categories and an additional 950,000 ounces in the resource categories.
Disclosure: The author has no position in Medusa Mining.