It was Medusa Mining Limited's (ASX: MML) turn to see its share price crash again today, dropping 14.9% to $1.315. Shares in the gold miner dropped 7% in mid-July.
ASX-Listed gold miners have extremely volatile share price movements, being so dependent on the gold price. Every day it seems one of them takes their turn to get sold off.
Medusa was the worst performer on the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) and in the All Ordinaries Gold sector today. Focus Minerals Ltd (ASX: FML) and Saracen Mineral Holdings Limited (ASX: SAR) were also hammered, down 7.7% and 6.5% respectively. Silver Lake Resources Ltd (ASX: SLR) was also on the nose, falling 5.4%.
Gold prices fell overnight, a factor reflected on most ASX-listed miners today. Spot gold close 0.4% down overnight at US$1288.60 an ounce, although it has risen above US$1290 an ounce in trading today.
Recent political news out of the Philippines could be affecting Medusa as it owns and operates the Co-O mine in there. The Indonesian government has announced a number of executive orders, including mining taxes and royalties. As yet, the impact on Medusa is not known, but it doesn't appear to be great news.
Still, with cash costs of US$418 per ounce for six months to June 2014, and received an average gold price of US$1,299 for 65,943 ounces of gold sold, Medusa appears to have some headroom, should the gold price sink further.
Additionally, Medusa has delisted its dual listing on the London Stock Exchange in May 2014, which should save it plenty of administration costs, and recently announced that it had removed around 1,000 contractors, which should benefit the company going forward. Of course, that is likely to result in quite a large one-off expense.
With very little in the way of debt and US$14 million cash in the bank, today's sell down appears to be an overreaction.
