Medusa Mining Limited (ASX: MML) shares are edging lower today following an update regarding the company's Co-O Gold Mine. Before the ASX market halted in late morning trade, the Medusa share price was marginally down 0.6% to 79.5 cents.
Let's take a closer look at Medusa and see what is said today.
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What does Medusa do?
Medusa is an Australian-based gold producer, focusing on growth opportunities in the Asia Pacific region. The company operates two projects, the Co-O mine and the Royal Crowne Vein Prospect.
What's impacting the Medusa share price?
The Medusa share price edged lower in morning trade despite the company advising that its Philippines jointly operated Co-O gold mine resumed operations from 3 November.
The announcement follows the voluntary suspension of operations due to a number of COVID-19 cases detected within the workforce in October. Medusa Mining decided to halt operations and place the site on 'care and maintenance' only for a period of seven days.
In response to the outbreak, Medusa undertook a program of disinfection of communal sites and tested all members for COVID-19. Only after showing negative results, were workers then allowed to return to work.
As operations recommenced, Medusa revealed that it does not see an impact in gold production as a result. The company reaffirmed its FY21 production guidance of between 90,000 to 95,000 ounces of gold. Furthermore, the company's all-in sustaining cost is forecast to be between US$1200 to US$1250 per ounce. This is in line with previous projections indicated mid-last month.
To minimise the risk of infections at the Co-O site, Medusa has increased hygiene protocols and safety standards. This includes operating on a reduced workforce and conducting weekly regular testing of employees and contractors.
Workers who return with positive test results remain away from the site and enter into quarantine facilities or isolate at home.
What did management say?
Medusa chair and interim CEO, Mr Andrew Teo, commented on the resumption of operations. He said:
Temporarily suspending operations was the correct decision and we believe the risk of the further spread of infection at site (from the cases identified) has now been minimised. Our workforce has performed admirably in the circumstances, with operations running in line as planned upon resumption.
More on the Medusa share price
The Medusa share price has been on a bumpy road this year, falling to as low as 40 cents in March. Whilst now nearly double that at its current level, the Medusa share price is still a way off its multi-year high of $1.06 reached in August.
The company has a market capitalisation of $165.2 million and a price-to-earnings (P/E) ratio of 4.7. This could be considered quite low by mining standards, as most gold miners average a P/E ratio of around 13.
