At the time of writing, shares of Medusa Mining Ltd [ASX:MML] are up by 18.84%, to 41 cents per share.
Why did Medusa Mining Ltd shares do this?
The company announced that its production should be within a range of 90,000–100,000 ounces for the 2019 Financial Year. The company expects its breakeven cost to be within a range of US$1,050–US$1,150 per ounce.
What now for Medusa Mining Ltd?
The market reacted favourably to the news, as you can see on the chart below:
The share price has experienced a rough ride over the past few months. Today’s announcement was vastly appreciated by shareholders.
The company’s profit guidance assumes the E15 Service Shaft will be in production next month. If that’s the case, it should provide a material contribution in the second half of FY19. Once operational, the E15 Shaft should reduce the manpower and material movements from the L8 Shaft. That should increase production from the lower mine levels.
The bottom line: The profit forecast sounds good for shareholders. But it’s merely a forecast at the end of the day. The mining business is unpredictable and there’s often multiple delays. That said, assuming the numbers above prove true and the gold price holds up, shareholders could be rewarded handsomely in the months ahead.
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