Medusa Mining Limited (TSX:MLL)(ASX:MML)(AIM:MML) -
OVERVIEW:
Co-O MINE PRODUCTION
-- Record gold production of 21,108 ozs (compared to 18,054 ozs in the
previous quarter) at an average grade of 18.68 g/t gold and average cash
cost of US$184 per oz (US$136 per oz before taxes, royalties and local
production taxes)
Co-O PHASE II EXPANSION
-- Mine expansion to raise production to 100,000 ozs per annum in early
2010 is completed
-- Mill construction completed and commissioning commenced
-- New MPSA 299-2009-XIII with area of 2,200 hectares was granted abutting
the east side of the Co-O Mine MPSA
RE-INTERPRETED Co-O RESOURCE MODEL
-- Re-interpreted resource model (announced 18 January 2010), consistent
with Agsao Shaft Level 5 development, now provides an accurate
development based model for expanding the mine to the east
CONCEPTUALTARGET SIZE
-- Conceptual target size range from 3 million ozs in 9.3 million tonnes to
7 million ozs in 22 million tonnes using a grade range of 9 to 11 g/t
gold with a preferred average grade of the current resources of 10 g/t
gold
BANANGHILIG DEPOSIT
-- Planning is underway to commence a pre-feasibility study drilling
campaign in July 2010
LINGIG COPPER
-- Drilling with three surface rigs is continuing
EXPLORATION BUDGET
-- The exploration budget for the full year increased to US$18M
FINANCIALS
-- Consolidated cash balance of US$35.5 million
SNAPSHOT OF MEDUSA:
-- Expanding gold producer operating solely in the Philippines
-- Debt free and un-hedged
-- Forecast production FY 2009/10 revised upwards to 89,000 ozs
-- Long term cash costs at Co-O Mine circa US$190 per oz
-- Mineral Resources comprise
-- Co-O Mine: Indicated 580k ozs at 12.3 g/t gold; Inferred 660k ozs at
9.0 g/t gold
-- Bananghilig: Inferred 650k ozs at 1.3 g/t gold
-- Probable Reserves : Co-O Mine 500k ozs @ 14.9 g/t gold
-- Organic growth policy to potentially produce 300-400,000 ozs per year
-- Excellent exploration upside: high grade vein and disseminated bulk gold
targets, plus six porphyry copper targets
Board of Directors
Geoffrey Davis
(Managing Director)
Roy Daniel
(Finance Director)
Robert Weinberg
(Non-executive Director)
Peter Hepburn-Brown
(Non-executive Director)
Capital Structure:
Ordinary shares: 170,381,960
Unlisted options: 1,340,000
Listings:
ASX & AIM (Code: MML), TSX (Code: MLL)
Address and Contact Details:
PO Box 860
Canning Bridge WA 6153
Telephone: +618 9367 0601
Facsimile: +618 9367 0602
Email: admin@medusamining.com.au
Website: www.medusamining.com.au
PROJECT OVERVIEW
To view the "The locations of the Company's projects are shown on Figures 1 and
2." maps, please visit the following links:
http://media3.marketwire.com/docs/Fig1a.pdf
http://media3.marketwire.com/docs/Fig2a.pdf
Co-O MINE
GOLD PRODUCTION
The production statistics for the December 2009 quarter and half year with
comparatives for the December 2008 quarter and half year periods are summarised
in Table I.
Table I. Gold production statistics
----------------------------------------------------------------------------
Description Unit Quarter Quarter Half-year Half-year
ended 31 ended 31 ended 31 ended 31
Dec 2009 Dec 2008 Dec 2009 Dec 2008
----------------------------------------------------------------------------
Tonnes mined tonnes 53,064 25,575 93,498 49,534
----------------------------------------------------------------------------
Ore milled tonnes 37,588 25,575 78,055 49,534
----------------------------------------------------------------------------
Head grade gpt 18.68 15.84 16.65 12.71
----------------------------------------------------------------------------
Recovery % 94% 93% 94% 92%
----------------------------------------------------------------------------
Gold produced (1) ounces 21,108 12,158 39,162 19,144
----------------------------------------------------------------------------
Cash costs (2) US$ US$184 US$215 US$189 US$225
----------------------------------------------------------------------------
Gold sold ounces 21,108 12,158 39,162 19,144
----------------------------------------------------------------------------
Average gold price
received US$ US$1,111 US$800 US$1,047 US$812
----------------------------------------------------------------------------
Note:
-----
(1) Gold production is actual gold produced during the period and does not
reflect changes in the balance of gold in circuit;
(2) Cash costs refer to the cost of gold mined (net of mine development
costs), produced and sold and includes taxes, royalties and local
production taxes of US$48 per ounce for the Dec 2009 qtr (Dec 2009 half-
year of US$46 per oz).
Gold production for the quarter increased to 21,108 ounces (a 17% increase from
the previous quarter's production) at an average grade of 18.68 g/t gold and
cash costs of US$184 per ounce.
Medusa is an unhedged gold producer and received an average gold price of
US$1,111 per ounce from the sale of 21,108 ounces of gold for the quarter.
Phase II of the Company's expansion programme is on schedule, and the
incremental benefits of that expansion are flowing through as evidenced by the
record gold production of 39,162 ounces for the past six months. The forecast
gold production for the fiscal year to 30 June 2010 has been revised upwards
from 86,000 ounces to 89,000 ounces at an anticipated average cash cost of
US$190 per ounce.
As described in the announcement dated 16 May 2007 regarding the occurrence of
"black leader" high grade mineralisation in some veins, there has been an
unusual amount of black leader material in recent mine development activities
which is responsible for the current high grades. The occurrence of black leader
material rarely shows up in drilling and at this stage, its occurrence is not
predictable.
A breakdown of actual and forecasted production ounces and cost per ounce by
quarters for the last six quarters and the remaining two quarters of this fiscal
year is highlighted in Graph 1.
To view the Graph 1. Co-O quarterly production graph, please visit the following
link:
http://media3.marketwire.com/docs/Graph1a.pdf
PHASE II EXPANSION
(a) Mine Production
The mine can now produce at the required rate of approximately 750 tonnes per
day to achieve a production rate of approximately 100,000 ounces annualised.
The vertical Ventilation Shaft near the Baguio Shaft is now being fitted with a
skip and headframe to haul mineralised material as sufficient mineralised
material has now been located above Level 1.
(b) Mill Expansion
The new mill crushing, screening and washing circuits were completed on
schedule. A new back-up genset due to arrive early December was delayed by the
Christmas period until the second week of January. Commissioning of the mill
expansion has commenced.
(c) Tailings Dam
Construction of a new eight year life tailings dam is progressing and is due for
completion mid-year 2010 subject to favourable weather conditions.
(d) Power
The Company has been evaluating several options to replace the rural power line
currently in use from San Francisco to the mill site with a dedicated power
line, as the current rural line is becoming unreliable due to the increase in
load. The favoured option (in agreement with the local power co-operative) will
involve the installation of a new power line along the same route as the current
power line and the cost of the capital outlay by the Company will be offset by a
reduction in future power tariffs.
RE-INTERPRETATION OF RESOURCE MODEL
The sole purpose of the re-interpretation was to correct inconsistencies to the
east of the Oriental Fault between previous drillhole based interpretations and
the on-going development on Level 5 from the Agsao Shaft. The revised resource
is JORC and NI 43-101 compliant. A large number of drill hole intersections are
yet be included in the re-interpreted resource model (Fig.3).
Table II. Co-O Mine mineral resource estimates for the major veins.
----------------------------------------------------------------------------
Vein name Category greater than 0 g/t gold
---------------------------------------------
tonnes g/t gold contained ounces
----------------------------------------------------------------------------
Central Indicated 342,000 9.57 110,000
Inferred 250,000 3.27 26,000
----------------------------------------------------------------------------
Jereme Indicated 97,000 14.53 45,000
Inferred 93,000 7.81 23,000
----------------------------------------------------------------------------
Jereme Footwall Indicated 82,000 16.84 44,000
Inferred 73,000 12.73 30,000
----------------------------------------------------------------------------
Great Hamish Indicated 188,000 21.16 130,000
Inferred 191,000 10.79 66,000
----------------------------------------------------------------------------
Great Hamish FW Indicated 170,000 11.42 63,000
Inferred 196,000 12.21 77,000
----------------------------------------------------------------------------
Roysan Indicated 96,000 23.10 71,000
Inferred 98,200 23.29 73,000
----------------------------------------------------------------------------
Catto 1 Indicated 56,000 18.28 30,000
Inferred 54,000 18.99 33,000
----------------------------------------------------------------------------
East Agsao 4 Inferred 196,000 12.01 76,000
----------------------------------------------------------------------------
Other veins Indicated 420,000 6.50 90,000
Inferred 1,140,000 7.10 260,000
----------------------------------------------------------------------------
Total Indicated 1,450,000 12.3 580,000
----------------------------------------------------------------------------
Total Inferred 2,290,000 9.0 660,000
----------------------------------------------------------------------------
The resource estimations have been undertaken by Cube Consulting Pty Ltd,
2010.
Note: Rounding may result in some slight discrepancies in totals
This re-interpretation has marginally decreased the Inferred Resources but
maintained the Indicated Resources taking into account production of 39,162
ounces and stockpiles containing approximately 8,500 ounces. This now provides
an accurate development based model for expanding the mine to the east.
Thirty-five veins have now been modelled with resources and more are expected to
be identified. Future resource updates will be done annually in June-July.
Discussion
Diamond drilling has continued since the resource model update announced on 1
July 2009 and focused on extending the Co-O vein system. A total of 52 drill
holes have been completed (as announced on 10 December 2009) since the previous
resource estimation and considered for inclusion in the re-interpreted resource
model in conjunction with available underground sampling data, and excluding
mined material.
Thirty five veins now have resources allocated to them, with a number of the new
veins, particularly the East Agsao series of veins, being open in almost all
directions. The vein system is open at depth.
It should be noted that a large number of drill holes in a number of areas shown
on Figure 4 are still to be included in resource estimates, and will be included
as the confidence levels increase and demonstrated continuity improves through
additional drilling and/or development.
As a result of extensive development from the bottom of the Agsao Shaft (Level
5) since the previous resource estimate, this new wireframe model has corrected
previously noted (see announcement of 1 July 2009) inconsistent vein
orientations on the east side of the Oriental Fault. It is now clear from the
underground development that the vein system continues in an easterly direction,
disrupted in places by north-trending step-faulting, which generally down-throws
the veins on the east side of each fault. Re-interpretation as straight veins
has resulted in some inferred resources loss compared to the previous
interpretation of curved veins which was based solely on drillhole data.
Figure 5 shows all the current development in the mine.
Resource drilling is continuing with the aim of increasing confidence levels for
interpretation in some areas which will result in the inclusion of more drill
hole intersections as well as extensions to the vein system.
Stockwork/stringer mineralisation
At the western end of the mine, preliminary work suggests the possible presence
of a number of stockwork or stringer zones where narrow quartz veins over widths
of 5 to 6 metres have been developed. One of these has been defined as
approximately 40 metres long within the Great Hamish Vein. An Alimak rise within
this zone has been completed between Levels 2 and 3 demonstrating continuity and
that it is open above and below these levels. Two early bulk samples tested
through the mill returned head grades of 14 and 17 g/t gold. Alimak long-hole
stoping (much cheaper than shrink stoping) is about to commence in this zone and
will be employed if other similar zones are defined.
Other potentially similar stockwork or stringer zones may be present in parts of
other veins and a similar zone outcrops near the Tinago Shaft which will be
subject to additional exploration. A drive to connect the Baguio Shaft and the
Tinago Shaft on Level 3 is underway and expected to allow underground assessment
of previous drill hole TIN 3 with a similar interpreted style adjacent to the
Central Vein and between Levels 2 and 3. It returned two close spaced
intersections of 3.80 metres at 21.15 g/t gold and 6.60 metres at 2.45 g/t gold
(see announcement dated 28 February 2007).
Specific gravity
A programme of specific gravity ("SG") measurements is underway for the lower
levels of the mine. Initial results indicate that the currently used SG of 2.45
may be conservative. This programme should be completed before the next resource
estimate.
Vein modelling
Cube Consulting Pty Ltd of Perth, Western Australia was contracted to undertake
the resource estimations. A wireframe model of the vein system and the mine
depletions were based on all available information as at 7 December 2009. A 2D
longitudinal modelling approach was used and is based on an accumulation
variable incorporating mineralised vein horizontal width and intercept grade.
Variography was used to analyse the spatial continuity of the horizontal width
and accumulation variables within the mineralised veins and to determine
appropriate estimation inputs to the interpolation process. The accumulation
variables were interpolated into blocks using Ordinary Kriging. High grade
limits were applied to gold prior to the calculation of the accumulation
variable. Mineral resources have been reported in accordance with The 2004
Australasian Code for Reporting of Mineral Resources and Ore Reserves (JORC
Code) and Canadian National Instrument 43-101.
RESOURCE DRILLING
On 10 December 2009 the drilling results for drill holes MD 165 to 216 were
released. These results are summarised in Table III which should be read in
conjunction with the 10 December 2009 announcement which contains more detail
and intersections down to 0.2 metres downhole width.
Table III. Drill hole results greater than 3 g/t gold and greater than 0.5
metres downhole width for holes MD 165 to MD 216.
----------------------------------------------------------------------------
Grade
(uncut)
Hole East North Dip Azimuth From Width (g/t
(degrees) (degrees) (metres) (metres) gold)
----------------------------------------------------------------------------
MD 166 613606 913221 -45 186 45.55 0.55 3.06
----------------------------------------------------------------------------
MD 168 613423 913169 -47 185 191.10 4.00 3.76
----------------------------------------------------------------------------
MD 170 613809 913202 -46 190 109.40 1.00 5.28
--------------------------------
137.45 0.50 8.27
--------------------------------
519.85 1.00 3.50
--------------------------------
636.25 2.15 18.43
----------------------------------------------------------------------------
MD 171 614677 912995 -57 166 413.80 3.10 3.67
--------------------------------
430.85 1.00 7.40
----------------------------------------------------------------------------
MD 172 613420 913124 -45 171 54.85 1.60 3.05
--------------------------------
114.20 1.00 7.41
--------------------------------
127.20 0.80 5.01
--------------------------------
243.45 0.85 83.47
----------------------------------------------------------------------------
MD 173 613411 913106 -47 185 76.30 0.50 13.21
--------------------------------
99.10 2.00 6.49
----------------------------------------------------------------------------
MD 175 613713 913335 -55 190 383.80 1.00 4.16
----------------------------------------------------------------------------
MD 178 614532 913023 -70 160 314.10 0.50 59.44
--------------------------------
334.55 0.65 18.71
--------------------------------
395.05 2.90 6.75
--------------------------------
459.80 1.55 9.73
----------------------------------------------------------------------------
MD 179 613351 912825 -68 217 65.65 2.80 7.43
--------------------------------
113.65 0.75 100.63
----------------------------------------------------------------------------
MD 180 613870 913302 -45 190 403.50 0.65 8.37
--------------------------------
427.50 3.01 3.06
----------------------------------------------------------------------------
MD 183 613352 912824 -63 171 65.30 0.85 13.73 (i)
--------------------------------
151.05 1.25 14.66 (i)
----------------------------------------------------------------------------
MD 187 614226 913131 -56 180 210.70 1.10 6.54
--------------------------------
421.50 1.10 4.32 (i)
--------------------------------
438.55 0.50 9.35 (i)
----------------------------------------------------------------------------
MD 188 613475 912843 -45 185 53.80 0.65 47.90
--------------------------------
127.95 1.00 3.89
--------------------------------
160.80 2.60 9.65
----------------------------------------------------------------------------
MD 189 614532 913021 -70 175 322.95 1.00 3.37
--------------------------------
394.00 2.95 5.74
--------------------------------
401.65 2.15 15.41
--------------------------------
436.40 2.40 18.89
--------------------------------
497.40 0.50 11.59
--------------------------------
671.00 0.90 32.29
----------------------------------------------------------------------------
MD 190 613342 912848 -71 196 29.80 1.00 3.67
--------------------------------
155.40 1.30 11.03
----------------------------------------------------------------------------
MD 191 613522 912806 -56 187 149.80 1.70 14.90
----------------------------------------------------------------------------
MD 195 613331 912882 -70 189 16.10 1.00 6.71 (i)
--------------------------------
211.00 0.50 13.55
----------------------------------------------------------------------------
MD 196 614163 913110 -50 175 99.20 0.90 4.03
--------------------------------
434.10 1.50 5.78
--------------------------------
485.10 3.20 11.37
--------------------------------
492.85 0.20 3.76
--------------------------------
520.00 0.20 3.62
--------------------------------
539.75 2.00 103.36
--------------------------------
544.90 1.65 62.36
----------------------------------------------------------------------------
MD 197 614226 913107 -60 180 98.60 3.05 6.04
--------------------------------
123.80 2.15 6.08
--------------------------------
408.50 1.00 3.29
--------------------------------
411.85 1.20 6.31
--------------------------------
438.00 0.90 4.17
--------------------------------
463.25 1.35 6.34
--------------------------------
495.55 1.25 3.88
----------------------------------------------------------------------------
MD 199 614567 913137 -58 158 401.40 1.55 8.27 (i)
--------------------------------
430.60 1.90 24.07 (i)
--------------------------------
551.05 0.50 26.54 (i)
--------------------------------
561.00 1.20 3.07 (i)
--------------------------------
566.00 1.50 6.63 (i)
----------------------------------------------------------------------------
MD 200 614533 913020 -45 175 515.80 1.70 41.69 (i)
----------------------------------------------------------------------------
MD 201 613316 912930 -75 127 43.35 2.10 5.15 (i)
--------------------------------
128.90 0.50 4.77 (i)
----------------------------------------------------------------------------
MD 202 614157 913197 -52 175 255.30 0.50 64.93 (i)
----------------------------------------------------------------------------
MD 204 614294 913116 -45 180 91.20 2.10 3.47 (i)
----------------------------------------------------------------------------
MD 205 614536 913221 -64 158 214.55 1.30 9.07 (i)
--------------------------------
474.85 0.60 4.66 (i)
--------------------------------
515.45 0.55 4.47 (i)
----------------------------------------------------------------------------
MD 210 613478 912846 -85 185 90.45 6.35 8.46 (i)
--------------------------------
234.55 0.85 18.90 (i)
--------------------------------
240.40 2.45 3.56 (i)
--------------------------------
313.10 1.70 3.87 (i)
----------------------------------------------------------------------------
MD 211 614009 912469 -50 192 134.25 1.25 8.90 (i)
--------------------------------
163.70 4.15 6.25 (i)
--------------------------------
197.95 1.20 3.02 (i)
----------------------------------------------------------------------------
MD 213 613320 912924 -80 180 58.80 2.25 3.06 (i)
--------------------------------
72.55 1.15 3.53 (i)
----------------------------------------------------------------------------
Notes:
------
i. Intersection widths are downhole drill widths not true widths;
ii. Assays denoted (i) are Philsaga assays, all others are by McPhar
Geoservices Inc in Manila; and
iii. Grid coordinates based on the Philippine Reference System 92.
Drilling is continuing along and across strike at the Co-O Mine using six
surface diamond drill rigs with the aim of increasing confidence levels in some
areas and identifying additional mineralisation that can be developed for
production.
Co-O MINE CONCEPTUAL TARGET SIZE (ii)
Estimates (Table IV) have been undertaken for the Co-O Mine conceptual target
size(ii) based on a drill-defined strike length of approximately 1,500 metres
and up to 2,000 metres based on potential extensions.
Aggregate across-strike widths of the veins of 5 and 8 metres (ie, adding the
width of each individual vein across strike to give an aggregate vein width) are
regarded as possibly conservative. Depths of between 500 and 750 metres below
Level 1 (adit level) in the mine are regarded as geologically reasonable as a
few deeper drill holes below 400 metres below Level 1 have intersected good
grade mineralisation.
The estimate used a grade range of 9 to 11 g/t gold with a preferred average
grade of the current resources of 10 g/t gold.
Table IV. Co-O Mine conceptual target parameters and estimates (ii)
----------------------------------------------------------------------------
Strike Depth below Aggregate Conceptual Gold grade Conceptual
length Level I Vein width tonnes (g/t) contained
(metres) (metres) (metres) ounces
----------------------------------------------------------------------------
1,500 500 5 9,375,000 10 3,125,000
----------------------------------------------------
8 14,700,000 10 4,725,000
----------------------------------------------------
10 18,750,000 10 6,250,000
------------------------------------------------------------------
750 5 15,000,000 10 5,000,000
----------------------------------------------------
8 22,050,000 10 7,000,000
----------------------------------------------------
10 30,000,000 10 10,000,000
------------------------------------------------------------------
1000 5 18,750,000 10 6,250,000
----------------------------------------------------
8 29,400,000 10 9,450,000
----------------------------------------------------
10 37,500,000 10 12,500,000
----------------------------------------------------------------------------
2,000 500 5 12,500,000 10 4,160,000
----------------------------------------------------
8 19,600,000 10 6,300,000
----------------------------------------------------
10 25,000,000 10 8,125,000
------------------------------------------------------------------
750 5 20,000,000 10 6,660,000
----------------------------------------------------
8 29,400,000 10 9,450,000
----------------------------------------------------
10 40,000,000 10 10,330,000
------------------------------------------------------------------
1,000 5 25,000,000 10 8,125,000
----------------------------------------------------
8 39,200,000 10 10,200,000
----------------------------------------------------
10 50,000,000 10 16,250,000
----------------------------------------------------------------------------
Notes:
------
i. SG of 2.45 used for all estimates;
ii. Estimates rounded to nearest 1000; and
iii. Highlighted cases indicate most geologically reasonable based on
current knowledge.
(ii) The potential target size and grade is conceptual in nature, and there
has been insufficient exploration to define a mineral resource, and it
is uncertain if further exploration will result in the target being
defined as a mineral resource.
REGIONAL DRILLING
Up to three surface rigs are testing new veins around the Co-O Mine as shown on
Figure 6. The aim of this drilling is to extend the vein system so that
additional production scenarios can be considered through replicating mining
infrastructure.
The Co-O vein system outcrops at surface on the western side of the Oriental
Fault, where it was first discovered. The veins at surface rarely exceed 0.5
metres width and generally assay around 1 to 5 g/t gold (with possibly some
supergene enrichment). Gold values started to increase significantly
approximately 80 metres below surface.
Up to the announcement on 9 December 2009, 16 drill holes (EXP 1 to 16) had been
completed. Results are available for EXP 1 to 12 (Table V) where strongly
anomalous values have been obtained from a number of individual samples in
excess of 0.5g/t gold and up to 5.13 g/t gold. These mineralised structures will
be assessed for further follow-up either along strike or at depth.
Table V. Drill hole results greater than 0.5 g/t gold for holes EXP 1 to 12.
----------------------------------------------------------------------------
Grade
(uncut)
Hole East North Dip Azimuth From Width (g/t
(degrees) (degrees) (metres) (metres) gold)
----------------------------------------------------------------------------
EXP 2 613792 912724 -63 130 24.50 2.00 1.39 (i)
--------------------------------
62.55 1.35 1.72 (i)
--------------------------------
Incl. 63.55 0.35 5.13 (i)
--------------------------------
179.30 1.00 1.60 (i)
--------------------------------
185.30 1.00 0.65 (i)
--------------------------------
190.30 0.70 0.71 (i)
--------------------------------
416.60 1.00 0.58 (i)
--------------------------------
446.70 1.00 0.53 (i)
--------------------------------
452.00 1.00 0.79 (i)
----------------------------------------------------------------------------
EXP 3 615733 911967 -60 175 232.00 1.00 0.71 (i)
----------------------------------------------------------------------------
EXP 10 614880 913266 -70 158 583.30 1.00 0.55 (i)
--------------------------------
636.15 0.35 2.20 (i)
--------------------------------
659.60 1.00 0.65 (i)
--------------------------------
671.45 1.45 0.77 (i)
----------------------------------------------------------------------------
EXP 12 614961 913050 -47 162 782.90 0.70 0.76 (i)
--------------------------------
783.75 0.65 0.72 (i)
--------------------------------
785.35 0.55 0.85 (i)
----------------------------------------------------------------------------
Notes:
------
i. Assays denoted (i) are Philsaga assays;
ii. Grid coordinates based on the Philippine Reference System 92;
iii. Assays awaited for EXP 13 to 16; and
iv. Intersections widths are downhole drill widths not true widths.
To view the Figure 3. Co-O Mine 3D vein model, please visit the following link:
http://media3.marketwire.com/docs/Fig3a.pdf
To view the Figure 4. Co-O Mine plan view of the vein system projected to Level
5, please visit the following link:
http://media3.marketwire.com/docs/Fig4a.pdf
To view the Fig. 5. 3D view of the Co-O underground development, please visit
the following link:
http://media3.marketwire.com/docs/Fig5a.pdf
To view the Figure 6. Co-O Mine area showing adjacent veins and regional
exploration drill holes, please visit the following link:
http://media3.marketwire.com/docs/Fig6a.pdf
LINGIG COPPER PROJECT
The Lingig prospect is covered by a Mines Operating Agreement ("MOA") over
Mineral Production Sharing Agreement ("MPSA") application number APSA 024-XIII
comprising two parcels situated to the north and to the east (the Lingig
porphyry copper prospect) of the Co-O Mine and millsite as shown on Figure 2.
Drilling is continuing with three drilling rigs. The most recent results were
announced on 12 October 2009.
TAMBIS-BAROBO REGION
The Tambis project, currently comprising the Bananghilig Gold Deposit and the
Kamarangan copper porphyry prospect (Fig. 2), is operated under a Mining
Agreement with Philex Gold Philippines Inc. over Mineral Production Sharing
Agreement ("MPSA") application APSA-000022-XIII which covers 6,262 hectares.
Figure 2 shows the location of the Bananghilig Deposit. Planning is underway for
a major drilling campaign commencing around July 2010 as the basis for
pre-feasibility studies. The aim of the work will be to increase the resources
to a level which could provide a 5 year minimum mining life at a production rate
of approximately 200,000 ounces per year.
ANOLING
The Mines Operating Agreement ("MOA") with Alcorn Gold Resources Inc. covers
MPSA application number 039-XIII situated approximately 8 kilometres north from
the millsite as shown on Figure 2. Processing of the MPSA is progressing.
Mapping and sampling is continuing. Drilling will recommence when the MPSA is
granted.
OTHER PROJECTS
-- Sur-sur Project.
The Company is advancing the tenement applications.
-- Saugon Project
Re-mapping, re-logging of core and sampling are continuing in preparation for
drilling in 2010.
FINANCIALS
As at 31 December 2009, the Company which is debt free, had a consolidated cash
balance of US$35.5 million (Sep 2009: US$25.2 million);
During the quarter,
-- The Company received proceeds of US$23.4 million from the sale of 21,108
ounces of gold at an average sale price of US$1,111 per ounce;
-- Incurred exploration expenditure of US$5.8 million (Sep 2009 qtr: US$3.4
million);
-- Spent US$1.7 million on capital works associated with the mine and mill
expansion (Sep 2009 qtr: US$2.3 million); and
-- Expensed US$1.8 million in mine development costs (Sep 2009 qtr: US$2.4
million).
CORPORATE
-- Mr Kevin Tomlinson resigned as Non-Executive Chairman of the Company on
13 January 2010.
Information in this report relating to Exploration Results is based on
information compiled by Mr Geoff Davis, who is a member of The Australian
Institute of Geoscientists. Mr Davis is the Managing Director of Medusa Mining
Limited and has sufficient experience which is relevant to the style of
mineralisation and type of deposits under consideration and to the activity
which he is undertaking to qualify as a "Competent Person" as defined in the
2004 Edition of the "Australian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves" and is a "Qualified Person" as defined in
"National Instrument 43-101" of the Canadian Securities Administrators. Mr Davis
consents to the inclusion in the report of the matters based on his information
in the form and context in which it appears.
Information in this report relating to Mineral Resources has been estimated and
compiled by Mark Zammit of Cube Consulting Pty Ltd of Perth, Western Australia.
Mr Zammit is a member of The Australasian Institute of Mining & Metallurgy and
has sufficient experience that is relevant to the style of mineralisation and
type of deposit under consideration and to the activity which he is undertaking
to qualify as a Competent Person as defined in the 2004 Edition of the
"Australian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves" and is a "Qualified Person" as defined in "National Instrument 43-101"
of the Canadian Securities Administrators. Mr Zammit consents to the inclusion
in the report of the matters based on his information in the form and context in
which it appears. Refer to the Technical Report which was filed on www.sedar.com
in November 2009 for further discussion of the Co-O Deposit's geology,
structural controls, drilling, sampling and assaying information, and any known
material environmental, permitting, legal, title, taxation, socio-political,
marketing or other relevant issue.
Information in this report relating to Ore Reserves is based on information
compiled by Declan Franzmann, B Eng (Mining), MAusIMM. Mr Franzmann is a
full-time employee of Crosscut Consulting. Mr Franzman has sufficient experience
which is relevant to the style of mineralisation and type of deposit under
consideration and to the activity which they are undertaking to qualify as
Competent Persons as defined in the 2004 Edition of the "Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves" and is a
"Qualified Person" as defined in "National Instrument 43-101" of the Canadian
Securities Administrators. Mr Franzmann consents to the inclusion in the report
of the matters based on his information in the form and context in which it
appears.
Refer to the Technical Report which was filed on www.sedar.com in November 2009
for further discussion of the Co-O Deposit's geology, structural controls,
drilling, sampling and assaying information, and any known material
environmental, permitting, legal, title, taxation, socio-political, marketing or
other relevant issue.
A revised Technical Report will be lodged with SEDAR within 45 days of this
announcement.
ABOUT MEDUSA MINING LIMITED
Medusa Mining Limited ("Medusa" or the "Company"), a public company listed on
the ASX, AIM and the TSX, is an Australian based gold producer, focussed solely
on the Philippines.
With current mineral resources comprising Indicated 580,000 ounces of gold and
Inferred 1,310,000 ounces of gold, Medusa's corporate strategy is to become a
mid tier 300,000 to 400,000 ounce per year, low cost gold producer.
The Company is currently expanding its high grade Co-O Mine operations
(Indicated Resources 580,000 ounces of gold inclusive of a Probable Reserve of
500,000 ounces of gold, and Inferred Resources 660,000 ounces of gold) to
increase its forecast production to 100,000 ounces per year in 2010, and is
conducting near mine exploration to assess the possibilities of further
expansion to 200,000 ounces per year. Current cash costs at the Co-O Mine are
approximately US$200 per ounce.
A pipe-line of deposits is now being established with the Bananghilig Deposit
(Inferred Resource of 650,000 ounces of gold) recently added and which is
expected to expand, potentially in conjunction with nearby discoveries.
Further potential upside exists in the discovery of substantial copper deposits
within the tenement holding of greater than 800km2.
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