Quarterly Report
15 April 2009 - 4:02PM
UK Regulatory
TIDMMML
MEDUSA MINING LIMITED
(AIM: MML)
QUARTERLY ACTIVITIES REPORT
PERIOD ENDED 31 MARCH 2009
Medusa Mining Limited ("Medusa" or the "Company"), through its
Philippines operating company Philsaga Mining Corporation
("Philsaga"), announces its Quarterly Activities Report for the
period ending 31 March 2009.
Highlights:
Co-O MINE EXPANSION
* Phase I expansion nearing completion to raise gold production
to 60,000 ozs per year in Q3 2009. The 8E Shaft was completed to
depth. The Agsao Shaft produced its first development ore.
* Phase II expansion to raise gold production from 60,000 ozs to
100,000 ozs per annum in early 2010 is progressing on schedule
(this is independent of Phase I expansion);
* The Phase II Baguio Shaft is at a depth of 158 metres and on
schedule.
Co-O MINE PRODUCTION
* Gold production of 12,716 ozs (compared to 12,158 ozs in the
previous quarter) at an average grade of 13.05 g/t gold and average
cash cost of US$211 per ounce.
Co-O RESOURCES DRILLING
* Resource drilling is continuing at depth and along strike.
Drilling is progressing to the east of the Agsao River and
approximately 350 metres east of the Agsao Shaft.
* A drilling update will be provided during the next quarter.
LINGIG PORPHYRY COPPER DISCOVERY
* Drilling update included encouraging intersections of 125
metres at 0.26% copper, 267 metres at 0.62% copper and 224 meters
at 0.77% copper. Drilling is continuing.
KAMARANGAN PORPHYRY PROSPECT
* First pass drilling has been completed. A summary report will
be provided during the next quarter.
CORPORATE
* The Company on 6 March 2009, completed the placement of
20,300,000 shares at A$1.21 per share to clients of Euroz
Securities Limited, to raise gross proceeds of $24,563,000.
Geoff Davis, Managing Director of Medusa, commented:
" The continuing increases in gold production and corresponding
decreases in cash costs are a pleasing result of the Phase I
expansion programme to 60,000 ounces annualised production. The Phase
II expansion to 100,000 ounces annualised production is on track for
completion in early 2010. The Co-O Deposit is continuing to exhibit
its pedigree as a world class deposit in terms of potential financial
returns."
For further information, please contact:
Medusa Mining Limited +61 8 9367 0601
Geoffrey Davis, Managing Director
Roy Daniel, Finance Director
Fairfax I.S. PLC +44 (0)20 7598 5368
Nominated Adviser / Joint Broker
Ewan Leggat / Laura Littley
Mirabaud Securities Limited +44 (0)20 7321 2508
Joint Broker
Peter Krens
Lothbury Financial +44 (0)20 7011 9411
Michael Padley / Libby Moss
PROJECT OVERVIEW
The locations of the Company's projects are shown on Figures 1 and 2
(please see the link at the end of this announcement).
Co-O MINE
GOLD PRODUCTION
The production statistics for the current financial year are
summarised in Table I.
Table I. Gold Production
+-------------------------------------------------------------------+
| Period | Gold | Grade | Cash | Comments |
| | produced | | costs | |
|------------+----------+-------+----------| |
| | (ozs) | (g/t | (US$ per | |
| | | gold) | oz) | |
|------------+----------+-------+----------+------------------------|
| Jul to Sep | 6.986 | 10.42 | 243 | On-vein development |
| 2008 | | | | and stoping |
|------------+----------+-------+----------+------------------------|
| Oct to Dec | 12,158 | 15.84 | 215 | On-vein development |
| 2008 | | | | and stoping |
|------------+----------+-------+----------+------------------------|
| Jan to Mar | 12,716 | 13.05 | 211 | On-vein development |
| 2009 | | | | and stoping |
|------------+----------+-------+----------+------------------------|
| TOTAL | 31,860 | 12.83 | 220 | |
+-------------------------------------------------------------------+
Gold production increased by 4.6% during the quarter to 12,716 ozs at
an average recovered grade of 13.05 g/t gold and average cash cost of
US$211 per ounce. The reduction in grade compared to the previous
quarter is primarily due to the contribution of development ore from
the Agsao Shaft.
The Company expects a further incremental increase in gold production
in the forthcoming quarter with the full benefits of the Phase I
expansion to 60,000 ounces annualised production on track to flow
through in the third quarter of 2009.
PHASE I EXPANSION
Expansion works continued on schedule during the quarter is
approximately 1,665 metres of development completed (previous quarter
1,256 metres). The connection of the 8E (Beta) and Agsao Shafts is
the last stage of the Phase I expansion. This development work is
underway from the Agsao Shaft and will shortly be underway from the
8E Shaft.
(a) Agsao Shaft
Development along two veins on Level 5 westwards towards the 8E Shaft
is underway.
(b) 8E (Beta) Shaft
The 8E Shaft was completed to an inclined depth of 120 metres (100
metres vertical). The sump and plat are completed with the
construction of a water dam and installation of pumping systems and
other services in progress. Driving towards the Agsao Shaft will
commence shortly.
PHASE II EXPANSION
Work on the Phase II expansion is well advanced and on schedule.
(a) Baguio Shaft
The Baguio Shaft to approximately 204 metres inclined depth is
currently at 158 metres and on schedule.
(b) Hillview Shaft
A decision on the position of this high capacity three compartment
shaft is expected when sufficient deep drilling is completed.
(c) Mill Expansion
The construction of two new leach tanks at the mill was completed in
February. Site works have commenced for the installation of an
expanded crushing circuit to reduce the feed size to the ball mill
and hence increase ball mill throughput to approximately 1,000 tonnes
per day depending on rock characteristics.
(d) Tailings Dam
The raising of the wall of the current tailings dam has commenced and
design work, geotechnical drilling and permitting of a new tailings
dam are in progress.
ELECTRIC COMPRESSORS
Two electric compressors for the eastern end of the mine arrived in
late March and are currently being installed.
The power line has been extended to the Baguio Shaft at the western
end of the mine. Two electric compressors are expected to arrive
during the next quarter for installation at the western end.
RESOURCE and RESERVE DRILLING
Drilling in and around the Co-O Mine (Figs 3 and 4) (please see the
link at the end of this announcement) testing the vein system at
depth and along strike is continuing with six surface drill rigs.
Deep drilling of the Great Hamish Vein and other veins within the
mine area continues to show vein continuity at depth.
Drilling east of the Agsao River (Figure 4) (please see the link at
the end of this announcement) has intersected extensions of the main
vein system approximately 350 metres east of the Agsao Shaft.
A drilling update should be available in June 2009.
A resource estimation update should be available during July 2009.
A reserve estimation update should be available during August 2009.
LINGIG PORPHYRY COPPER DISCOVERY
The Lingig prospect is covered by a Mines Operating Agreement ("MOA")
over 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 (please
see the link at the end of this announcement).
GEOLOGICAL SETTING
Figure 5 (please see the link at the end of this announcement) shows
the current interpretation of the regional geology and Table II
contains drill hole results to date. Figure 6 (please see the link
at the end of this announcement) shows a longitudinal projection of
the drilling completed to date and the relevant historical drill
holes.
Comparison with the Atlas Mine on Cebu Island shows there may be some
similarities with the structural setting and styles of
mineralisation. At Atlas, mineralisation is hosted predominantly in
intrusive porphyry rocks at the Biga Barot and Carmen deposits, and
predominantly in volcanic rocks (and associated with some intrusive
and mineralised porphyry sills or dykes) at the Lutopan deposit where
mineralisation is 120 metres thick and 900 metres long. The Biga and
Carmen deposits are located between two steeply dipping regional
scale faults (Bureau of Mines and Geosciences, 1986).
The Atlas deposits, including mined material, have total resources of
1.53 billion tonnes at 0.41% copper and 0.24 g/t gold
(www.atlasphilippines.com).
MINERALISED THRUST ZONE
Since commencing drilling in June 2008, the Company has completed
approximately 4,000 metres in 8 holes (angle and vertical) utilising
one drilling rig. Drilling difficulties were experiencd in several
holes which led to the premature abandoning of LIN 1 and 4
drillholes. LIN 4, which was twinned by LIN 5, has not as yet been
assayed. LIN 8 has just been completed and assays are awaited.
The mineralisation discovered by a 1974 aid programme in drill hole
DDH 1 (the five DDH aid programme holes are now relabelled as JDH 1
to JDH 5, see the announcement dated 13 November 2007 and the
December 2007 quarterly report dated 31 January 2008 for detailed
descriptions) has now been shown to be contained within an extensive
east dipping 200 to 300 metre thick thrust zone. The thrust footwall
is an unmineralised quartz diorite which intruded the basaltic
sequence (numerous basalt xenoliths are present near the diorite
contact). The intrusive contact appears to have subsequently become
the footwall of the regional thrust zone.
The mineralised porphyry intersected in the bottom of the discovery
hole JDH 1 (and subsequently in several new holes) appears to be a
north-plunging or dipping partly mineralised porphyry sill up to
approximately 100 metres thick within the thrust zone. Some chilling
has been noted in places on its contacts. This porphyry sill has also
been found as a west-trending 60 metre long copper mineralised
outcrop approximately 200 metres southeast of holes LIN 2 and 3. Its
full extent, role in mineralisation and degree of mineralisation are
not yet understood.
Within the thrust zone, and to a lesser extent above the thrust,
there is widespread epidote alteration as epidote veins, epidote
quartz-sulphide veins and disseminated epidote clots and disseminated
grains. To date the epidote alteration has been ubiquitous in the
area drilled. Magnetite as disseminations and veins is generally
closely associated with the copper mineralisation.
Sulphide mineralisation within the copper mineralised zone comprises
fairly ubiquitous pyrite up to 10% and lesser copper sulphides
predominantly as chalcopyrite with some chalcocite and minor bornite,
particularly in holes LIN 2 and 3.
Assaying of selected samples from hole LIN 6 indicates that the
mineralising system is clean and does not contain arsenic, mercury or
antimony above detection limits.
Roadways approximately 200 to 300 metres south of LIN 2 and 3 have
exposed intensely sulphide (now limonite) veined and stockworked,
argillically weathered basalt indicating that the mineralisation is
likely to extend beyond these outcrops to the south.
The footwall of the thrust fault is interpreted to extend southwards
at least as far as the quartz dacite intrusive complex.
Mineralisation, possibly within or related to the thrust, located
approximately 1,500 metres south of the current drilling was
intersected by previous drill holes JDH 3 and 5 (Table II).
Mineralisation controls and trends within the thrust will become
clearer as drilling progresses over the coming months.
QUARTZ DACITE PORPHYRY INTRUSIVE COMPLEX
The extensive quartz dacite intrusive complex to the south of the
current drilling covers an area of approximately 2km by 1.5km. In
1996-97 Barrick Gold (Phils) Inc. undertook extensive sampling of
outcropping altered material targeting bulk gold mineralisation. An
old report indicates that 16 outcrop samples returned gold values in
the range from 0.2 to 1.5 g/t gold, however detailed sample location
maps are not available.
Large areas of the complex are brecciated and commonly silicified and
quartz vein stockworked. Many of the silicified rocks are cut by late
fine quartz veining. Sulphides (now limonite) generally comprise 1 to
5% of the silicified rock. Argillic alteration is also present in
some areas.
Other areas of sulphidic milled breccias with approximately 30 to 50%
milled fragments in a 50 to 70% limonite matrix have been observed.
Some deeper creek exposures show common chalcopyrite and lesser
covellite.
A comprehensive programme of mapping, outcrop sampling, and in some
areas, soil sampling, is continuing.
WORK PROGRAMME
One drilling rig will continue working along the thrust zone and has
commenced LIN 9 to the south of LIN 2 and 3, and will then work its
way southwards.
Additional rigs will be added when they become available.
Table II. Summary of new Lingig drilling results and relevant 1974
drilling results for
intersections >10 metres wide (including sub-grade material up to 10
metres wide).
+-----------------------------------------------------------------------------------------+
|Hole |East |North |Azimuth |Dip | Cut-off 0.1% copper |
| | | | | |------------------------------------------------|
| | | | | |From |To |Width |Grade |Gold |
| | | | | |(metres) |(metres) |(metres) |(% Cu) |(g/t) |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
|LIN 1 |652072 |896918 |0 |-90 | 71.00| 196.10| 125.10| 0.26 | 0.03 |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
| | | | | | | | | | |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
|LIN 2 |652075 |896844 |0 |-90 | 2.00| 269.30| 267.30| 0.62 | 0.06 |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
| | | | | | | | | | |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
| | | | | | | | | | |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
| | | | | | | | | | |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
|LIN 3 |652075 |896844 |180 |-60 | 0.00| 224.00| 224.00| 0.77 | 0.11 |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
| | | | | | | | | | |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
| | | | | | | | | | |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
| | | | | | | | | | |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
| | | | | | | | | | |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
|LIN 6 |651994 |897150 |166 |-62 | 94.10| 114.10| 20.00| 0.13 | 0.01 |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
| | | | | | 280.40| 294.40| 14.00| 0.14 | 0.01 |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
| | | | | | 362.20| 421.60| 59.40| 0.31 | 0.02 |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
|JDH 1 |652073 |896908 |0 |-90 | 52.00| 250.00| 198.00| 0.34 | 0.01 |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
| | | | | | | | | | |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
| | | | | | | | | | |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
|JDH 3 |651865 |895926 |0 |-90 | 12.00| 100.00| 88.00| 0.14 | 0.00 |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
|JDH 5 |651828 |895648 |0 |-90 | 18.00| 100.00| 82.00| 0.18 | 0.00 |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
| | | | | | 224.00| 242.00| 18.00| 0.15 | 0.00 |
+-----------------------------------------------------------------------------------------+
+-----------------------------------------------------------------------------------------+
|Hole |East |North |Azimuth |Dip | Cut-off 0.3% copper |
| | | | | |------------------------------------------------|
| | | | | |From |To |Width |Grade |Gold |
| | | | | |(metres) |(metres) |(metres) |(% Cu) |(g/t) |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
|LIN 1 |652072 |896918 |0 |-90 | 118.50| 153.50| 35.00| 0.32 | 0.02 |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
| | | | | | 161.50| 196.10| 34.60| 0.35 | 0.04 |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
|LIN 2 |652075 |896844 |0 |-90 | 26.00| 240.65| 214.65| 0.72 | 0.07 |
|------+--------+--------+---------+-----+------------------------------------------------|
| | | | | |Including |
|------+--------+--------+---------+-----+------------------------------------------------|
| | | | | | 132.00| 142.65| 10.00| 1.00 | 0.27 |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
| | | | | | 172.00| 240.65| 68.65| 1.03 | 0.08 |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
|LIN 3 |652075 |896844 |180 |-60 | 10.00| 222.00| 212.00| 0.80 | 0.07 |
|------+--------+--------+---------+-----+------------------------------------------------|
| | | | | |Including |
|------+--------+--------+---------+-----+------------------------------------------------|
| | | | | | 68.00| 146.00| 78.00| 1.16 | 0.21 |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
| | | | | | 180.00| 190.00| 10.00| 1.02 | 0.06 |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
| | | | | | 206.00| 218.00| 12.00| 0.98 | 0.20 |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
|LIN 6 |651994 |897150 |166 |-62 | 364.20| 400.20| 36.00| 0.37 | 0.03 |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
| | | | | | | | | | |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
| | | | | | | | | | |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
|JDH 1 |652073 |896908 |0 |-90 | 100.00| 112.00| 12.00| 0.43 | 0.00 |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
| | | | | | 134.00| 146.00| 12.00| 0.40 | 0.00 |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
| | | | | | 200.00| 250.00| 50.00| 0.67 | 0.04 |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
|JDH 3 |651865 |895926 |0 |-90 | | | | | |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
|JDH 5 |651828 |895648 |0 |-90 | | | | | |
|------+--------+--------+---------+-----+----------+----------+----------+-------+-------|
| | | | | | | | | | |
+-----------------------------------------------------------------------------------------+
Notes:
(i) Holes LIN 1 and 4 were terminated prematurely due to bad
ground conditions. No assays are currently available for LIN 4 which
was subsequently twinned by LIN 5.
(ii) Assays are awaited for LIN 8.
TAMBIS-BAROBO AREA
The Tambis project, currently comprising the Bananghilig and
Kamarangan prospects, 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.
BANANGHILIG
Interpretation work of the diatreme breccia hosted mineralisation is
continuing.
KAMARANGAN PORPHYRY TARGET
A first pass drilling programme of ten holes has been completed. A
drilling update should be available during the next quarter.
ANOLING
The Mines Operating Agreement ("MOA") with Alcorn Gold Resources Inc.
covers Mining Production Sharing Agreement ("MPSA") application
number 039-XIII situated approximately 8 kilometres north from the
millsite as shown on Figure 2 (please see the link at the end of this
announcement). Processing of the Anoling MPSA is progressing.
Diamond drilling has been temporarily suspended as the rig is
currently undertaking geotechnical drilling on the new tailings dam
site.
OTHER PROJECTS
* Abacus Project
The MOA with Abacus Consolidated Resources and Holdings Inc. covers
Exploration Permit ("EP") application number 000028-XIII situated to
the north of the Co-O Mine and millsite.
Following compilation and review of regional sampling and mapping,
due to the lack of encouraging results and prospectivity and as only
45% of the tenement is available for exploration due to a watershed
reservation and oil palm plantations, the Company has commenced
proceedings to return this tenement to Abacus.
* Saugon Project
The Saugon regional ridge and spur soil sampling programme is under
revision.
* Bunawan Joint Venture (Medusa earning 70%)
The Company, through its Philippines operating company, Philsaga
Mining Corporation ("Philsaga"), signed a joint venture agreement
("JVA") with Bunawan Mining Corporation ("Bunawan") on 23 August
2007, the Philippine operating company of ASX listed Sierra Mining
Limited ("Sierra"), whereby Philsaga will earn a 70% joint venture
interest in Exploration Permit application ("EPA") 000037-XIII and
Mineral Production Sharing Agreement application ("APSA") 000003-XIII
(together the "Bunawan JV").
The Company through Philsaga Mining Corporation is continuing to
fulfil its obligations under the JVA.
CORPORATE
On 6 March 2009 the Company raised gross proceeds of $24,563,000 via
the issue of 20,300,000 shares at A$1.21 each to clients of Euroz
Securities Limited.
JORC COMPLIANCE - CONSENT OF COMPETENT PERSONS
Medusa Mining Limited
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 mineralization 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". 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.
Cube Consulting Pty Ltd
Information in this report relating to Mineral Resources has
been estimated and complied by Mark Zammit of Cube Consulting Pty
Ltd. 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". 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.
Cube Consulting is an independent Perth based resource industry
consulting firm specialising in geological modelling, resource
estimation and information technology.
Golder Associates Pty Ltd
The information in this report that relates to Ore Reserves is based
on information compiled by Peter Onley MBA, MSc, BSc (Hons), FAusIMM,
CP. Mr Onley is a full-time employee of Golder Associates Pty Ltd.
Mr Onley 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". Mr Onley consents to the inclusion in the report of the
matters based on their information in the form and context in which
it appears.
Golder Associates is a global consulting group employing more than
5500 staff offering services in earth engineering and environmental
sciences.
.
=--END OF MESSAGE---
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