MEDUSA MINING LTD., an Australian miner focused on the Philippines, has increased its production target for full year 2009-2010.

Medusa has mining tenements in central eastern Mindanao, the most developed site being the Co-O mine in Surigao del Sur.

The miner said in its quarterly report for the period ending September that it now aims to produce 86,000 ounces of gold, up from the previous target of 82,000 ounces.

The company?s optimism is grounded on improved production levels in the July-September period from the previous quarter.

The miner said that gold production during the July-September period reached 18,054 ounces from 16,009 ounces in the April-June quarter.

The July-September output had an average grade of 14.7 grams per ton gold and average cash cost of $193 an ounce.

Medusa sold all of the gold produced as of September and received proceeds of $17.6 million at an average sale price of $975 an ounce.

The Co-O gold mine?s phase II expansion is on schedule with gold production to ramp up to 100,000 ounces a year from the present 60,000 ounces.

The company said it was on target to achieve this expansion by the first quarter of 2010.

Mill expansion, on the other hand, is on schedule for completion in December.

For the fiscal year July 2008 to June 2009, Medusa produced 47,869 ounces of gold at a cash cost of $213 for the year.

All of that were sold at an average gold price of $880 over 12 months.