Quarterly Report>
Quarterly Report
(Thomson Reuters ONE) - MEDUSA MINING LIMITED (AIM: MML)QUARTERLY ACTIVITIES REPORT PERIOD ENDED 30 JUNE 2009Medusa Mining Limited ("Medusa" or the "Company"), through itsPhilippines operating company Philsaga Mining Corporation("Philsaga"), announces its Quarterly Activities Report for theperiod ending 31 March 2009.Highlights for the June 2009 quarter: * Phase I expansion to 60,000 annualised production, completed ahead of schedule; * Record production of 16,009 ounces (previous quarter 12,716 ounces); * Record low cash costs US$198 per ounce (US$152 per ounce before taxes, royalties and local production taxes); * Resource base increased to 1,380,000 ounces at 10.8 g/t gold (an annualised increase of 60%, or 518,000 ounces); * Reserve base increased by 101% to 500,000 ounces at 14.9 g/t gold which is sufficient to support a 5 year mine life at 100,000 ounces per year; * Phase II mine and mill programmes on schedule to meet the 100,000 ounce annualised production target in Q1 2010; and * Access to exploration tenements increased by 60 square kilometres to approximately 880 square kilometres.Geoff Davis, Managing Director, commented:"This quarter has produced some exceptional results. We continue tohit our targets on or ahead of schedule. The Co-O Mine continues tovindicate its perceived upside with the continual discovery of newhigh grade veins and extensions of current known ones."The Management is confident of achieving the growth targets whichthe Company has set itself over the next financial year". 22 July 2009For further information, please contact:Medusa Mining Limited +61 8 9367 0601Geoffrey Davis, Managing DirectorRoy Daniel, Finance DirectorFairfax I.S. PLC +44 (0)20 7598 5368Nominated Adviser / Joint BrokerEwan Leggat / Laura LittleyMirabaud Securities Limited +44 (0)20 7321 2508Joint BrokerPeter KrensLothbury Financial +44 (0)20 7011 9411Michael Padley / Libby MossCOMPANY PROFILE: KEY POINTS: Co-O MINE EXPANSION* Resources at Co-O Mine are 1,380,000 ounces (at) 10.8 g/t gold * Phase I expansion completed with in 3,980,000 tonnes production of 60,000ozs annualised achieved ahead of* Reserves at Co-O Mine are schedule 500,000 ounces (at) 14.9 g/t gold in 1,041,000 tonnes * Phase II expansion to raise production from 60,000 ozs to* Forecast production FY 2009/10 100,000 ozs per annum in early of 82,000 ounces 2010 is on schedule* Phase I expansion completed * The Phase II Baguio Shaft has been completed ahead of schedule* Phase II expansion on schedule and has commenced hauling to raise production from 60,000 ozs to 100,000 ozs annualised in Co-O MINE PRODUCTION Q1 2010 * Gold production of 16,009 ounces* Anticipated long term cash costs (compared to 12,716 ozs in the of US$200 per ounce; previous quarter) at an average grade of 14.28 g/t gold and* Exploration area expanded to average cash cost of US$198 per >880 km² along 70 km strike of ounce (US$152 per ounce before the richly endowed East Mindanao taxes, royalties and local Ridge production taxes)Share capital as at 30 June 2009: * Gold production for the year ofShares: 47,869 ounces at an average168.691,960 grade of 13.30 g/t gold andUnlisted options 3,030,000 average cash cost of US$213 per ounce.Listings:Australian Securities Exchange Co-O RESOURCES UPDATE(Home Exch)Alternative Investment Market * Resources increased by 15% to(London) 1,380,000ozs (at) 10.8g/t gold inASX & AIM code: MML 3,980,000 tonnes * Annual increase of 60% or 518,000 ounces * Vein system strike length increased by approximately 400 metres to the east to approximately 1,400 metresFor further information contact: Co-O RESERVES UPDATEGeoff Davis * Reserves increased by 101% toManaging Director 500,000 ounces (at) 14.9 g/t gold contained in 1,041,000 tonnes LINGIG COPPER * Drilling with 3 rigs in progress with an update due next quarter KAMARANGAN PORPHYRY PROSPECT * First pass drilling has located a fertile diorite with copper and molybdenum mineralisation and adjacent copper-gold skarn mineralisation CORPORATE * Conversion of 2 million options at $1.25 to raise $2.5 million * The Company's Philippines subsidiary company, Mindanao Mineral Processing and Refining Corporation was granted a four year tax concession * The Company was added to the S&P/ASX200 on 8 July 2009 * Consolidated cash balance of A$33.1 millionPROJECT OVERVIEWThe locations of the Company's projects are shown on Figures 1 and 2.(please see the link at the end of this announcement).Co-O MINEGOLD PRODUCTIONThe production statistics for the current financial year aresummarised in Table I.Table I. Gold production statistics+-------------------------------------------------------------------+| | | Quarter ended | Year ended || Period | Unit | 30 June 2009 | 30 June 2009 ||------------------------+-----------+---------------+--------------|| Tonnes mined | tonnes | 38,196 | 118,076 ||------------------------+-----------+---------------+--------------|| Ore milled | tonnes | 36,622 | 116,451 ||------------------------+-----------+---------------+--------------|| Head grade | gpt | 14.28 | 13.30 ||------------------------+-----------+---------------+--------------|| Recovery | % | 94% | 93% ||------------------------+-----------+---------------+--------------|| Gold produced (1) | ounces | 16,009 | 47,869 ||------------------------+-----------+---------------+--------------|| Cash costs (2) | US$ | US$198 | US$213 ||------------------------+-----------+---------------+--------------|| Gold sold | ounces | 19,510 | 47,869 ||------------------------+-----------+---------------+--------------|| Average gold price | US$ | US$926 | US$880 || received | | | |+-------------------------------------------------------------------+Note:(1) Gold production, is actual gold poured during the period anddoes not reflect changes in the balance of gold in circuit(2) Cash costs refers to the cost of gold mined (net ofdevelopment costs), produced and sold and includes taxes, royaltiesand local production taxes of US$46 per ounce (YTD US$40 per ounce)Gold production for the quarter increased to 16,009 ounces (a 26%increase from the previous quarter's production) at an average gradeof 14.28 g/t gold and cash costs of US$198 per ounce.For the year ended 30 June 2009, the Co-O Mine produced a total of47,869 ounces at an average grade of 13.30 g/t gold and cash costs ofUS$213 per ounce.Medusa is an unhedged gold producer and received an average goldprice of US$926 per ounce from the sale of 19,510 ounces of gold forthe quarter. For the year, the Company sold 47,869 ounces at anaverage gold price of US$880 per ounce.With Phase 1 of its expansion programme completed and the Phase 2expansion programme on schedule, the Company is on track to deliverapproximately 82,000 ounces in the forthcoming fiscal year at ananticipated cash cost of US$200 per ounce. A breakdown of forecastedproduction ounces and cost per ounce by quarters for the next fourquarters is highlighted in Graph 1. (please see the link at the endof this announcement).PHASE I EXPANSIONThe Phase I expansion to produce 60,000 annualised ounces wascompleted in the quarter, ahead of schedule, with the results flowingthrough in the June quarter's record production to date of 16,009ounces.PHASE II EXPANSIONWork on the Phase II expansion is on schedule.(a) Baguio ShaftThe Baguio Shaft has been completed ahead of schedule and connectedto the Level 3 workings via an on-vein drive along the Great HamishVein. Driving has now commenced south towards the Great HamishFootwall Vein. Stope preparation activities on veins in the vicinityof the Baguio Shaft (Great Hamish and Jereme Veins) are in progress.(b) Mill ExpansionSite works and fabrication for the installation of an expandedcrushing circuit are progressing on schedule. Provided key componentsare delivered on time, it is anticipated that completion will be inDecember.(c) Tailings DamThe work on the wall of the current tailings dam is nearingcompletion. Construction of a new tailings dam will commence shortly.ELECTRIC COMPRESSORSThe two electric compressors for the western end of the mine havearrived and preparations for installation are in progress.RESOURCE ESTIMATEOn 2 July 2009, a new resource estimate increase of 15% was announcedof 1,380,000 ounces at 10.8 g/t gold in 3,980,000 tonnes of ore. Forthe year to 30 June 2009, the Co-O Mine resource base has increasedby 60% or 518,000 ounces.Table II summarises the resources and Table III summarises the veinswith more than 50,000 ounces of contained gold. The new 3D model forthe Co-O Mine vein system is shown in Figure 3 and Figure 4 shows theprojection of the veins onto Level 5 with the drilling that has beenincorporated into the new resource. (please see the link at the endof this announcement).The drilling was focused on improving vein continuity to the west ofthe Oriental Fault which has resulted (in conjunction with on-veindevelopment) in an increase in Indicated Resources, and also onexploring for extensions to the east of the Agsao River.The first resource wireframe shape has been modelled to the east ofthe Agsao River. There are a number of drill intersections in thisarea which are likely to form additional resources as continuity andextensions are confirmed by additional drilling.Table II. Co-O resource estimate to 14 June 2009+------------------------------------------------+| Category | > 0 g/t gold || |----------------------------------|| | tonnes | g/t gold | ounces ||-------------+-----------+----------+-----------|| Indicated | 1,250,000 | 15.0 | 603,000 ||-------------+-----------+----------+-----------|| Inferred | 2,730,000 | 8.9 | 777,000 ||-------------+-----------+----------+-----------|| Grand total | 3,980,000 | 10.8 | 1,380,000 |+------------------------------------------------+Table III. Co-O resource estimate for veins containing >50,000 ounces+-------------------------------------------------------------------+| Vein name | Category | > 0 g/t gold || | |-----------------------------------------|| | | tonnes | g/t | contained || | | | gold | ounces ||-------------+-----------+--------------+---------+----------------|| Central | Indicated | 484,000 | 11.17 | 174,00 ||-------------+-----------+--------------+---------+----------------|| | Inferred | 481,000 | 5.83 | 90,000 ||-------------+-----------+--------------+---------+----------------|| | Sub-total | 964,000 | 8.51 | 264,00 ||-------------+-----------+--------------+---------+----------------|| Jereme | Indicated | 71,000 | 14.90 | 34,000 ||-------------+-----------+--------------+---------+----------------|| | Inferred | 155,000 | 10.33 | 51,000 ||-------------+-----------+--------------+---------+----------------|| | Sub-total | 225,000 | 11.77 | 85,000 ||-------------+-----------+--------------+---------+----------------|| Jereme | | | | 24,000 || West | Indicated | 51,000 | 14.31 | ||-------------+-----------+--------------+---------+----------------|| | Inferred | 152,000 | 7.90 | 39,000 ||-------------+-----------+--------------+---------+----------------|| | Sub-total | 203,000 | 9.52 | 62,000 ||-------------+-----------+--------------+---------+----------------|| Great | | | | 202,000 || Hamish | Indicated | 179,000 | 34.98 | ||-------------+-----------+--------------+---------+----------------|| | Inferred | 250,000 | 9.79 | 79,000 ||-------------+-----------+--------------+---------+----------------|| | Sub-total | 429,000 | 20.32 | 280,000 ||-------------+-----------+--------------+---------+----------------|| Great | | | | 101,000 || Hamish FW | Inferred | 385,000 | 8.19 | ||-------------+-----------+--------------+---------+----------------|| | Sub-total | 385,000 | 8.19 | 101,000 ||-------------+-----------+--------------+---------+----------------|| Edphil | | | | 31,000 || | Indicated | 144,000 | 6.76 | ||-------------+-----------+--------------+---------+----------------|| | | | | || | Inferred | 181,000 | 9.67 | 56,000 ||-------------+-----------+--------------+---------+----------------|| | | | | 87,000 || | Sub-total | 325,000 | 8.38 | ||-------------+-----------+--------------+---------+----------------|| New Catto 1 | | | | 35,000 || | Indicated | 22,000 | 49.67 | ||-------------+-----------+--------------+---------+----------------|| | | | | 92,000 || | Inferred | 84,000 | 33.99 | ||-------------+-----------+--------------+---------+----------------|| | | | | 127,000 || | Sub-total | 106,000 | 37.27 | ||-------------+-----------+--------------+---------+----------------|| New Catto 3 | | | | 52,000 || | Indicated | 49,000 | 33.12 | ||-------------+-----------+--------------+---------+----------------|| | | | | 77,000 || | Inferred | 47,000 | 51.17 | ||-------------+-----------+--------------+---------+----------------|| | | | | 129,000 || | Sub-total | 96,000 | 41.89 | ||-------------+-----------+--------------+---------+----------------|| Other veins | Sub-total | 1,280,000 | 5.93 | 245,000 ||-------------+-----------+--------------+---------+----------------|| Grand Total | | 3,980,000 | 10.80 | 1,380,000 |+-------------------------------------------------------------------+ The resource estimations have been undertaken by Cube ConsultingPty Ltd.RESERVE ESTIMATECrosscut Consulting of Queensland, Australia were contracted toundertake a reserve estimation based on the resource wireframe modelprovided by Cube Consulting Pty Ltd. A resource totalling 1,380,000ounces at a grade of 10.8g/t gold was announced on 1 July 2009.The Probable Reserve as at 14 June 2009, now stands at 1,041,000tonnes at 14.9 g/t gold containing 500,000 ounces of gold.This represents an increase of 101% or 251,000 ounces over theProbable Reserve of 249,000 ounces at 10.8 g/t gold announced inAugust 2008. Mine depletion since the 2008 estimate is excluded fromthe new estimate. This ore reserve will allow an approximate 5 yearmine life at a production rate of 100,000 ounces per year.The Probable Reserve was estimated from an Indicated Resource of1,250,000 tonnes at 15.0 g/t gold containing 603,000 ounces of gold.The estimate was based on a gold price of US$900 per ounce and astope cut-off grade of 3.3 g/t gold.RESOURCE DRILLINGDiscussionFigure 4 (please see the link at the end of this announcement) showsa composite map of the veins projected to Level 5 with all thediamond drill holes from MD 114 to MD 165 totalling 28,985 metreswhich have been completed around the Co-O Mine since 1 December 2008.The drilling east of the Agsao River has been deep to date to ensureintersections are achieved and to demonstrate the veins are present.Shallower drilling will also be conducted to ascertain the top of themineralisation. It is anticipated that continuing drilling willexpand the resources in this area as vein continuity is confirmed.Drill resultsTable IV summarises the surface diamond drilling results greater than3 g/t gold over greater than 0.5 metres from the Co-O Mine for drillholes from MD 114 to MD 165. These drill hole results are theaccepted results that have been incorporated into the new resourceestimate. Other reports containing intersections for holes numberedup to MD 114 in 2008 are dated 1 December and 11 August 2008. In 2007the announcements are dated 9 July, 15 May and 28 February. The 2007announcements also contain information regarding drilling andsurveying techniques, comments on vein interpretation andmethodologies and assaying protocols.Table IV. Co-O drill hole results >=3 g/t gold and >=0.5 metresdownhole for holes MD 114 to MD 165.+-------------------------------------------------------------------------------+|Hole | East| North|Dip |Azimuth| From| Width| Grade (uncut) (g/t|| | | | (°)| (°)|(metres)|(metres)| gold)||-------+------+------+----+-------+--------+--------+--------------------------||EAST of| | | | | | | ||AGSAO | | | | | | | ||-------+------+------+----+-------+--------+--------+--------------------------||MD 127 |614352|912938| -45| 160| 362.70| 1.00| 25.14||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 448.10| 0.65| 5.23||-------+------+------+----+-------+--------+--------+--------------------------||MD 130 |614426|912939| -57| 157| 332.60| 0.60| 4.07||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 422.70| 0.75| 6.03||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 597.90| 1.30| 33.86||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 604.70| 0.70| 9.23||-------+------+------+----+-------+--------+--------+--------------------------||MD 134 |614450|912991| -60| 159| 442.30| 2.60| 56.08||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 620.00| 1.00| 3.27||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 636.00| 1.75| 5.00||-------+------+------+----+-------+--------+--------+--------------------------||MD 139 |614426|912941| -60| 185| 355.40| 1.30| 5.18||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 382.40| 1.50| 19.08||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 399.75| 0.50| 8.83||-------+------+------+----+-------+--------+--------+--------------------------||MD 145 |614351|912939| -62| 159| 325.75| 0.65| 4.61||-------+------+------+----+-------+--------+--------+--------------------------||MD 146 |614432|912959| -58| 158| 328.35| 0.50| 100.27||-------+------+------+----+-------+--------+--------+--------------------------||MD 153 |614450|912994| -64| 159| 478.05| 2.30| 12.13||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 500.90| 1.00| 3.77||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 668.60| 1.35| 3.77||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 775.40| 1.00| 3.36||-------+------+------+----+-------+--------+--------+--------------------------||MD 156 |614512|912991| -60| 158| 678.95| 2.85| 19.63||-------+------+------+----+-------+--------+--------+--------------------------||MD 163 |614351|912939| -45| 165| 325.15| 0.85| 5.37||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 498.45| 1.95| 4.11||-------+------+------+----+-------+--------+--------+--------------------------||MD 165 |614627|912956| -59| 166| 514.20| 2.30| 3.04||-------+------+------+----+-------+--------+--------+--------------------------||WEST of| | | | | | | || AGSAO | | | | | | | ||-------+------+------+----+-------+--------+--------+--------------------------||MD 115 |613935|913000| -77| 190| 51.20| 0.60| 4.05||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 198.40| 1.40| 3.82||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 283.35| 0.50| 3.84||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 332.35| 0.80| 3.06||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 347.35| 4.85| 3.91||-------+------+------+----+-------+--------+--------+--------------------------||MD 118 |613844|912883| -69| 180| 242.20| 0.70| 14.70||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 321.40| 1.00| 3.09||-------+------+------+----+-------+--------+--------+--------------------------||MD 119 |613239|912901| -67| 163| 171.40| 1.70| 10.34||-------+------+------+----+-------+--------+--------+--------------------------||MD 120 |614127|912738| -73| 193| 246.90| 1.30| 16.54||-------+------+------+----+-------+--------+--------+--------------------------||MD 121 |613935|913001| -76| 234| 95.65| 0.75| 13.53||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 161.80| 1.50| 3.13||-------+------+------+----+-------+--------+--------+--------------------------||MD 124 |613386|912864| -79| 180| 136.50| 1.60| 16.13||-------+------+------+----+-------+--------+--------+--------------------------||MD 125 |613766|912844| -77| 180| 232.95| 0.30| 6.60||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 267.60| 1.20| 7.95||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 452.95| 1.15| 167.63||-------+------+------+----+-------+--------+--------+--------------------------||MD 126 |614116|912750| -72| 159| 253.60| 1.50| 140.52||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 348.95| 0.70| 3.02||-------+------+------+----+-------+--------+--------+--------------------------||MD 131 |613720|912874| -72| 180| 239.10| 2.35| 6.23||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 287.80| 0.70| 5.12||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 341.70| 1.75| 11.35||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 346.10| 1.50| 7.72||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 355.80| 0.65| 3.07||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 445.60| 4.50| 7.50||-------+------+------+----+-------+--------+--------+--------------------------||MD 132 |613403|912867| -52| 150| 206.10| 0.95| 52.18||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 208.30| 2.50| 9.55||-------+------+------+----+-------+--------+--------+--------------------------||MD 133 |613532|912849| -77| 196| 68.35| 1.00| 40.94||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 232.95| 2.45| 4.37||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 274.70| 0.50| 11.02||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 290.10| 1.60| 5.38||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 294.85| 1.25| 3.92||-------+------+------+----+-------+--------+--------+--------------------------||MD 135 |613904|912923| -68| 203| 124.45| 3.55| 4.36||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 377.10| 1.45| 3.92||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 466.70| 0.80| 13.03||-------+------+------+----+-------+--------+--------+--------------------------||MD 137 |613710|912859| -81| 180| 384.00| 0.65| 4.04||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 521.10| 1.00| 8.74||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 533.70| 5.45| 4.65||-------+------+------+----+-------+--------+--------+--------------------------||MD 138 |613513|912859| -84| 178| 163.35| 1.05| 26.93||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 256.10| 2.00| 4.58||-------+------+------+----+-------+--------+--------+--------------------------||MD 140 |613400|912866| -60| 187| 203.85| 2.00| 7.00||-------+------+------+----+-------+--------+--------+--------------------------||MD 141 |613709|912874| -74| 221| 244.40| 0.55| 16.33||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 264.20| 0.50| 10.93||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 286.80| 0.60| 12.83||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 500.50| 1.00| 19.13||-------+------+------+----+-------+--------+--------+--------------------------||MD 148 |613400|912867| -75| 187| 234..90| 1.65| 32.73||-------+------+------+----+-------+--------+--------+--------------------------||MD 152 |613422|912801| -69| 190| 123.90| 1.25| 9.28||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 131.00| 0.80| 40.22||-------+------+------+----+-------+--------+--------+--------------------------||MD 154 |613875|912807| -55| 190| 124.80| 0.70| 17.63||-------+------+------+----+-------+--------+--------+--------------------------||MD 155 |614281|912742| -57| 206| 445.60| 1.00| 3.15||-------+------+------+----+-------+--------+--------+--------------------------||MD 158 |613587|912873| -84| 180| 99.60| 2.50| 8.18||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 209.00| 1.15| 31.63||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 238.75| 3.05| 18.76||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 285.20| 1.80| 12.31||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 288.10| 1.00| 3.51||-------+------+------+----+-------+--------+--------+--------------------------||MD 159 |613788|913252| -45| 190| 197.65| 0.70| 4.47||-------+------+------+----+-------+--------+--------+--------------------------|| | | | | | 370.55| 0.55| 3.43||-------+------+------+----+-------+--------+--------+--------------------------||MD 160 |613932|912868| -48| 165| 308.80| 0.70| 3.33||-------+------+------+----+-------+--------+--------+--------------------------||MD 162 |613641|913127| -55| 191| 156.90| 1.00| 3.23|+-------------------------------------------------------------------------------+Notes:(i) All above assays accepted for incorporationinto a resource estimation;(ii) Grid coordinates based on the Philippine Reference System92;On-going drill programmeFrom early July, drilling with eight surface rigs will continue withthree focussing on the main mine area, three on eastern extensions ofthe vein system, and two will start drilling other untested veinsystems adjacent to the mine area.LINGIG COPPERThe Lingig prospect is covered by a Mines Operating Agreement ("MOA")over MPSA application number APSA 024-XIII comprising two parcelssituated to the north and to the east (the Lingig porphyry copperprospect) of the Co-O Mine and millsite as shown on Figure 2. (pleasesee the link at the end of this announcement).Figure 5 shows the location of the drill holes completed at the dateof the March 2009 quarterly report. The long section shown on Figure5 is available in the March 2009 quarterly report. (please see thelink at the end of this announcement).Three drilling rigs are currently operating at Lingig. An update isexpected during the next quarter.TAMBIS-BAROBO REGIONThe Tambis project, currently comprising the Bananghilig andKamarangan prospects, is operated under a Mining Agreement withPhilex Gold Philippines Inc. over Mineral Production SharingAgreement ("MPSA") application APSA-000022-XIII which covers 6,262hectares.BANANGHILIGIn the 1980s and 1990s a large amount of diamond and reversecirculation drilling totalling 29,477 metres in 344 holes wasundertaken by various explorers to investigate a large area ofmineralisation.In 2005 to 2007, Philsaga undertook underground exploration through a50 metre deep shaft, adits, and underground and surface drilling.Work has continued on the construction of geological andmineralisation models.KAMARANGAN PORPHYRY TARGETThe Kamarangan prospect is centrally located in a large aeromagneticanomaly approximately ten kilometres in diameter.The area is underlain by a steeply dipping, well-banded calcareoussequence that appears to be at least 1,600 metres wide. Thecalcareous sequence has been intruded by a complex of fine- tocoarser-grained diorites and some andesite bodies. The intrusiveshave changed the calcareous rocks to skarn rocks over an approximatearea of 1,600 metres by 1,400 metres. The skarn area is open to theeast under the younger overlying limestone. The surface geologyoutcrops are limited mainly to magnetite-rich horizons with secondaryhematite.Some of the skarn rocks may contain variable amounts of garnet,diopside, epidote and pyrite. Areas of siliceous hornfels andunaltered massive limestone were also intersected in the drilling.DiscussionTable V contains a summary of the significant drill hole results.The intersection of a "fertile" diorite and other vectors from thedrilling indicate a possible porphyry copper source to theeast-northeast of the drilling conducted to date based on:(i) Copper and gold values in dioritic rocks tend to behigher in holes KAM 1 and 2, and while visible copper minerals arepresent in KAM 4 although at a lower level than in KAM 1 and 2;(ii) Molybdenum mineralisation is visible in KAM 1 to amaximum value of 244 ppm and averages 37 ppm over the last 74 metresof the hole from 357.70 metres depth;(iii) Molybdenum mineralisation is visible in KAM 2 to amaximum value of 138ppm and averages 41 ppm over the last 46 metresof the hole from 405 metres depth. Other less coherent zones arepresent higher up in the hole.(iv) Skarn hosted gold with minor copper mineralisation isstrongest in KAM 7 in the northeast of the drilled area, suggestingthis hole is close to a mineralisation source.The well mineralised magnetite skarn in KAM 1 (26 to 42.3 metres) andin KAM 2 (40 to 44.2 metres) and the wide skarn style mineralisationin KAM 7 (0 to 19.5 metres, 211.1 to 267.1 metres and 410.8 to 426.8metres) could also be interpreted to be a halo above and around the250 by 130 metres elongate deep magnetic anomaly shown on Figure 6.This anomaly could possibly be interpreted as a pencil porphyry styletarget. (please see the link at the end of this announcement).Drill hole magnetite-rich samples will be submitted for estimation ofthe magnetite contents and preliminary metallurgical testing iffurther assessments regarding the prospect's magnetite potential arepositive.Further assessment will be undertaken including additional fieldwork.Table V. Kamarangan - summary of significant drill hole results+-------------------------------------------------------------------------------------------------+|Hole | East | North |Azimuth|Dip | From | Width |Gold |Copper|Lithology || | | | (°) | (°) |(metres)|(metres)|(g/t)| (%) | ||------+------+---------+-------+-----+--------+--------+-----+------+----------------------------||KAM 1 |612304| 942837 | 90 | -60 | 26.00| 16.30| 0.43| 0.59|Magnetite skarn ||------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|| | |including| | | 29.00| 4.30| 1.21| 1.44|Magnetite skarn ||------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|| | | | | | 147.90| 11.80| 0.03| 0.10|Hornfels ||------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|| | | | | | 173.70| 14.00| 0.06| 0.16|Diorite ||------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|| | | | | | 457.70| 30.00| 0.05| 0.15|Diorite ||------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|| | | | | | 495.70| 22.00| 0.03| 0.11|Diorite ||------+------+---------+-------+-----+--------+--------+-----+------+----------------------------||KAM 2 |612307| 942736 | 90 | -60 | 2.00| 49.20| 0.16| 0.16|Diorite with magnetite lense||------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|| | |including| | | 40.00| 4.20| 1.17| 0.43|Magnetite skarn ||------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|| | | | | | 210.00| 12.00| 0.03| 0.14|Diorite ||------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|| | | | | | 282.00| 18.00| 0.06| 0.11|Diorite ||------+------+---------+-------+-----+--------+--------+-----+------+----------------------------||KAM 3 |612304| 942837 | 270 | -60 | 239.90| 10.60| 0.17| 0.13|Diorite ||------+------+---------+-------+-----+--------+--------+-----+------+----------------------------||KAM 4 |612305| 942597 | 87 | -60 | 31.00| 10.00| 0.06| 0.14|Andesite porphyry ||------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|| | | | | | 110.00| 14.00| 0.07| 0.20|Andesite ||------+------+---------+-------+-----+--------+--------+-----+------+----------------------------||KAM 5 |611936| 942847 | 110 | -90 | 360.75| 11.00| 0.11| 0.02|Andesite ||------+------+---------+-------+-----+--------+--------+-----+------+----------------------------||KAM 7 |612215| 943161 | 90 | -50 | 0| 19.50| 0.12| 0.01|Calcareous sediments ||------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|| | | | | | 157.10| 16.00| 0.18| 0.09|Skarn ||------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|| | | | | | | | | |Skarn with magnetite 239.10 || | | | | | 211.10| 56.00| 0.26| 0.09|- 241.10 ||------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|| | | | | | | | | |Skarn with magnetite 410.80 || | | | | | 410.80| 16.00| 0.22| 0.27|- 418.80 ||------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|| | | | | | 446.85| 24.00| 0.64| 0.12|Skarn ||------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|| | |including| | | 452.85| 2.00| 7.21| 0.01|Skarn ||------+------+---------+-------+-----+--------+--------+-----+------+----------------------------||KAM 8 |612308| 942561 | 273 | -58 | 50.00| 18.00| 0.17| 0.06|Diorite ||------+------+---------+-------+-----+--------+--------+-----+------+----------------------------||KAM 10|611724| 942581 | 156 | -50 | 132.15| 13.05| 0.09| 0.01|Diorite ||------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|| | | | | | 397.50| 10.30| 0.13| 0.24|Andesite |+-------------------------------------------------------------------------------------------------+Notes:(i) Assaying by McPhar Geoservices Phils Inc. Au by fireassay with AAS finish; Ag, Cu, Pb, Zn and Mo by AAS; and(ii) Magnetite contents not yet determined(iii) Grid co-ordinates based on the Philippine ReferenceSystem 92(iv) KAM 6 - abandoned(v) KAM 9 - no significant resultsANOLINGThe Mines Operating Agreement ("MOA") with Alcorn Gold Resources Inc.covers Mining Production Sharing Agreement ("MPSA") applicationnumber 039-XIII situated approximately 8 kilometres north from themillsite as shown on Figure 2. Processing of the Anoling MPSA isprogressing. (please see the link at the end of this announcement).Mapping and sampling is continuing.OTHER PROJECTS* Additional Exploration AreasDuring the quarter the Company signed two Mines Operating Agreementswhich have a total area of 179 square kilometres increasing the areato which the Company has exploration access to approximately 881square kilometres.A Mines Operating Agreement ("MOA") was signed between PhilsagaMining Corporation ("Philsaga") and Sursur Mining Corporation("Sursur") for Exploration Permit applications XIII - 00176, 000180and 000181 with a total area of 15, 825 hectares (158 squarekilometres) as outlined in red on Figure 2. Sursur will receive a 3%gross royalty.A supplementary MOA was signed with Corplex Resources Inc.("Corplex") to incorporate additional areas of AFTA (XIII) 000004 asoutlined in orange on Figure 2. The additional areas total 2,106hectares (21 square kilometres) and Corplex will receive a 4% grossroyalty.* Abacus ProjectThe Company has returned this tenement to Abacus.* Saugon ProjectRe-mapping and sampling is continuing.* Bunawan Joint Venture (Medusa earning 70%)The Company, through its Philippines operating company, PhilsagaMining Corporation ("Philsaga"), signed a joint venture agreement("JVA") with Bunawan Mining Corporation ("Bunawan") on 23 August2007, the Philippine operating company of ASX listed Sierra MiningLimited ("Sierra"), whereby Philsaga will earn a 70% joint ventureinterest in Exploration Permit application ("EPA") 000037-XIII andMineral Production Sharing Agreement application ("APSA") 000003-XIII(together the "Bunawan JV").The Company notes the announcement dated 17 June 2009 of Bunawan'sAustralian listed parent company, Sierra Mining Limited, advisingthat EPA 000037-XIII had been denied on "the basis of certificationof non-consent issued by the National Commission of IndigenousPeople". Bunawan has indicated they will appeal against the decision.The Company through Philsaga Mining Corporation has commenced legalactions to enforce the JVA through Arbitration. A Demand Letter forArbitration under the rules of the Philippine Dispute ResolutionCentre Inc. ("PDRCI") has been sent to Bunawan.CORPORATE * The Company's Philippines subsidiary company, Mindanao Mineral Processing and Refining Corporation was granted a four year tax concession, commencing July 2009. * Conversion of 2,000,000 unlisted options at $1.25 in late May 2009, which added a further $2.5 million to cash reserves. * As at 30 June 2009, the Company which is debt free, had a consolidated cash balance of A$33.1 million. * The Company was added to the S&P/ASX 200 list on 8 July 2009.JORC COMPLIANCE - CONSENT OF COMPETENT PERSONSMedusa Mining LimitedInformation in this report relating to Exploration results, is basedon information compiled by Mr Geoff Davis, who is a member of TheAustralian Institute of Geoscientists. Mr Davis is the ManagingDirector of Medusa Mining Limited and has sufficient experience whichis relevant to the style of mineralization and type of deposits underconsideration and to the activity which he is undertaking to qualifyas a Competent Person as defined in the 2004 Edition of the"Australian Code for Reporting of Exploration Results, MineralResources and Ore Reserves". Mr Davis consents to the inclusion inthe report of the matters based on his information in the form andcontext in which it appears.Cube Consulting Pty LtdInformation in this report relating to Mineral Resources hasbeen estimated and complied by Mark Zammit of Cube Consulting PtyLtd. Mr Zammit is a member of The Australasian Institute of Mining &Metallurgy and has sufficient experience that is relevant to thestyle of mineralisation and type of deposit under consideration andto the activity which he is undertaking to qualify as a CompetentPerson as defined in the 2004 Edition of the "Australian Code forReporting of Exploration Results, Mineral Resources and OreReserves". Mr Zammit consents to the inclusion in the report of thematters based on his information in the form and context in which itappears.Cube Consulting is an independent Perth based resource industryconsulting firm specialising in geological modelling, resourceestimation and information technology.Crosscut ConsultingThe information in this report that relates to Ore Reserves is basedon 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 styleof mineralisation and type of deposit under consideration and to theactivity which they are undertaking to qualify as Competent Personsas defined in the 2004 Edition of the "Australasian Code forReporting of Exploration Results, Mineral Resources and OreReserves". Mr Franzmann consents to the inclusion in the report ofthe matters based on his information in the form and context in whichit appears..---END OF MESSAGE---http://hugin.info/138050/R/1330184/314320.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
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Datum: 22.07.2009 - 08:01 Uhr
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