Quake, rains crimp Co-O mine gold target

MANILA, Philippines—The combined effects of a strong temblor off Negros Island a month ago and frequent rains curbed an Australian miner’s gold production at the Co-O mine in Agusan del Sur.

In a report, Medusa Mining Limited trimmed its production outlook for fiscal year 2012 to 60,000 from the original guidance of 65,000 ounces.

Medusa Mining said its Philippine operating company, Philsaga Mining Corp., has taken four large mill tanks offline. The shutdown of the four tanks will limit the mill throughput to about 700 tons a day for the quarter.

The miner said that the tanks had started tilting, partly due to tremors and partly due to soggy ground conditions due to frequent rains since December 2011.

The magnitude-6.9 earthquake, centered near eastern Negros Island on February 6, 2012, claimed more than 100 lives.

Medusa Mining said it had initially planned to wait for late June 2012, upon completion of a new large leach tank currently under construction, before fixing the tilting tanks.

“However, following routine inspection, it was evident that the tilting problem had worsened and in the interest of operational safety, the company has decided to immediately take the tanks off-line until they have been repaired,” Medusa Mining said.

Remedial work on the tanks will start in April. The work is expected to take four to five months. In the meantime, all expansion work including the Saga Shaft, underground development, and new mill construction is on schedule.

Further disruptions are expected at the mine as Medusa Mining said its consultants have recommended electrical upgrades for the new expanded mill and mine.

With major new switch boards and transformers set for early arrival during the June 2012 quarter, the company said these components would be installed immediately to increase the safety standards, operational efficiencies, and the quality of power delivered to the operations.

This would improve power usage and would “considerably reduce” the maintenance of electrical motors, in particular pumps at the mine and in the mill, Medusa Mining said.

It is expected that between 10 and 14 days of production will be lost between the mill and the mine during the June 2012 quarter while the electrical upgrades are undertaken.