TIDMMML
MEDUSA MINING LIMITED
ABN: 60 099 377 849
Unit 7, 11 Preston Street
Como WA 6152
PO Box 860
Canning Bridge WA 6153
Telephone: 618-9367 0601
Facsimile: 618-9367 0602
Email: admin@medusamining.com.au
Internet: www.medusamining.com.au
MEDUSA MINING LIMITED
(AIM: MML)
HALF-YEAR FINANCIAL REPORT
31 DECEMBER 2008
Medusa Mining Limited ("Medusa" or the "Company"), is pleased to
report a net after tax profit for the six months to 31 December 2008
of A$12.0 million.
Highlights for the six months:
* Gold production of 19,144 ounces of gold, an increase of
119% (compared to 8,736 ounces in the same corresponding period in
2007) at an average production cost for the period of US$225 per
ounce;
* 40% increase in Co-O Mine JORC resource to over 1.2
million ounces;
* Phase I and Phase II expansion programmes on schedule,
with long term cash costs anticipated at US$200 per ounce.
Geoffrey Davis, Managing Director of Medusa, commented:
"The Company is starting to see the benefits of its development and
expansion programmes and is pleased to report that it is on schedule
to increase its gold production initially to 60,000 annualised ounces
by Q3, 2009 and then to 100,000 ounces per annum from Q1, 2010
onwards.
Being an unhedged, high margin gold producer, we are well positioned
for an exciting future as we continue to increase our gold production
this year.
Medusa is also continuing with an intensive drilling programme at
Co-O, designed to further delineate and increase its resource base."
5 March 09
For further information, please contact:
Medusa Mining Limited +61 8 9367 0601
Geoffrey Davis, Managing Director
Roy Daniel, Finance Director
Fairfax I.S. PLC +44 (0)20 7598 5368
Nominated Adviser / Joint Broker
Ewan Leggat
Mirabaud Securities Limited +44 (0)20 7321 2508
Joint Broker
Peter Krens
Lothbury Financial +44 (0)20 7011 9411
Michael Padley / Libby Moss
REVIEW OF OPERATIONS
A summary of activities for the period is presented below.
OPERATIONS OVERVIEW
The locations of the Company's projects are shown on Figures 1 and 2
(please see the link at the end of this announcement).
Figure 1. (please see the link at the end of this announcement)
Location diagram
Figure 2. (please see the link at the end of this announcement)
Regional tenement map showing mines and prospects.
Co-O MINE
GOLD PRODUCTION
The production statistics for the six months to 31 December 2008, are
summarised in Table I.
Table I. Gold Production
+-------------------------------------------------------------------+
| Period | Gold | Head | Cash | Comments |
| | produced | grade | costs | |
|------------+----------+-------+----------| |
| | (ozs) | (g/t | (US$ 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 |
|------------+----------+-------+----------+------------------------|
| TOTAL | 19,144 | 12.71 | 225 | |
+-------------------------------------------------------------------+
For the six months to 31 December 2008, the Company produced 19,144
ounces of gold (compared to 8,736 ounces of gold in the corresponding
period in 2007) at an average grade of 12.71 g/t gold and average
cash production costs of US$225 per ounce.
The benefits of the Phase 1 expansion commenced in September 2007 are
starting flow through in the last quarter of 2008.
Further incremental production increases are forecast in the coming
quarters 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 MINE EXPANSION
Expansion works have proceeded well during the half year with a total
of 2,893 metres of development completed. The connection of the 8E
and Agsao Shafts is the last stage of the Phase I expansion.
The levels in the mine have recently been renamed as follows:
Level 1: adit level or 3150 metre level
Level 2: 3100 metre level
Level 3: 3050 metre level
Level 4: 3000 metre level
Level 5: 2950 metre level, etc
(a) Agsao Shaft
The new external Agsao Shaft, to an inclined depth of 240 metres (200
metres vertical) reached final depth in early December with the
bottom of this shaft at Level 5. Cutting of the plat and installation
of services are in progress with driving along vein to connect to the
8E (or Beta) internal inclined shaft at Level 5 expected to commence
during January 2009.
(b) 8E(Beta) Shaft
The 8E Shaft to an inclined depth of 120 metres (100 metres vertical)
is currently at 89.50 metres inclined depth. The timing of the
completion of this shaft is being coordinated with the development
driving from the Agsao Shaft so that correct drainage levels between
the shafts can be set up.
PHASE II EXPANSION
Work on the Phase II expansion has commenced with the setting up of
the collar and headframe for the Baguio Shaft at the western end of
the mine. Sinking commenced in early October.
(a) Baguio Shaft
The Baguio Shaft is designed to provide ore from the western end of
the mine above Level 3 for the production increase in 2010 to 100,000
ounces annualised. It is an inclined shaft with a revised inclined
depth of approximately 240 metres. It is currently at a depth of
70.30 metres and, provided ground conditions are reasonable,
completion is estimated in late 2009.
(b) Ventilation Shaft
The vertical ventilation shaft at the western end of the mine to link
with upper level workings has been completed at 80 metres depth and
is now linked to the Levels 1 and 2 providing improved ventilation at
the western end of the mine. This shaft will be set-up to haul ore
derived from above Level 1.
(c) Hillview Shaft
A decision on the final position of this high capacity three
compartment shaft is expected next quarter.
(d) Mill Expansion
The construction of two new leach tanks at the mill (commenced in
August) which will boost leaching capacity to approximately 750
tonnes per day is expected to be completed during the next quarter.
Budgets and quotes are being finalised for the installation of an
expanded crushing circuit to reduce the feed size to the ball mill
and increase ball mill throughput to approximately 1,000 tonnes per
day depending on rock characteristics.
(e) Tailings Dam
Tailings dam quotes are currently being considered for raising the
wall of the current dam.
MINE GRID POWER
The grid power line to the Co-O Mine has been energised and is
performing satisfactorily. Arrival of electric compressors for the
eastern end of the mine is expected during the next quarter to
replace diesel compressors.
The power line is currently being extended to the western end of the
mine where electric compressors will also be installed.
RESOURCES AND RESERVES
On 19 January 2009 the Company published a new resource estimate
(Table II) for the Co-O Mine. The new estimation increases the
resources by 341,000 ounces or 40% (from 862,000 ounces) after
allowing for mine depletion since 12 August 2008. The main increase
is from the new high grade discovery named the Great Hamish Vein
which currently contains 318,00ounces in 265,000 tonnes at 37.3 g/t
gold.
The current resource (announced 19 January 2009) and reserve
(announced 27 August 2008) estimations are shown in Tables II and
III.
Table II. Co-O Mine resource summary
+------------------------------------------------+
| Category | > 0 g/t gold |
| |----------------------------------|
| | tonnes | g/t gold | ounces |
|-------------+-----------+----------+-----------|
| Indicated | 1,110,000 | 13.4 | 480,000 |
|-------------+-----------+----------+-----------|
| Inferred | 1,710,000 | 13.2 | 723,000 |
|-------------+-----------+----------+-----------|
| Grand total | 2,820,000 | 13.3 | 1,203,000 |
+------------------------------------------------+
Estimation undertaken by Cube Consulting Pty Ltd (2009)
Notes:
- A lower cut-off of 3 g/t gold is the designated lower cut-off
based on economic parameters;
- An uppercut of 300 g/t gold has been applied; and
- Resources are inclusive of reserves.
Table III. Reserve estimation summary
+-----------------------------------------+
| Category | > 3 g/t gold |
| |------------------------------|
| | tonnes | g/t gold | ounces |
|----------+---------+----------+---------|
| Probable | 712,000 | 10.77 | 249,000 |
+-----------------------------------------+
The reserve estimations were undertaken by Golder Associates Pty Ltd
(2008).
DRILLING
Table IV lists the surface diamond drilling results greater than 3
g/t gold from the Co-O Mine for drill holes MD 85 to MD 113 which are
included in the new resource estimate. Some intersections in MDs
85-88 have been previously reported on 11 August 2008. Other previous
announcements on the Co-O drilling on 9 July, 15 May and 28 February
2007 contain information regarding drilling and surveying techniques,
comments on vein interpretation and methodologies and assaying
protocols.
The discovery of a new high grade vein, the Great Hamish Vein, was
announced on 1 December 2008. This vein is open along strike and at
depth, and is currently being developed on two levels.
The GHV has been defined over approximately 550 metres on the west
side of the Oriental Fault and is interpreted to have been
intersected on the east side of the fault in holes MD 87, 98, 108
and 112 over a strike length of approximately 100 metres. The vein
has consistent high grades and generally dips northwards around
60-70º.
The GHV has been intersected by drives on Levels 2 (50 metres below
adit) and 3 (100 metres below adit), with driving on vein and
sub-level development commenced.
Assays from the levels to date are:
Level 2: Level drive: 119 metres length at average width of
1.4 metres at 39.79 g/t gold
Sublevel: 133 metres length at average width
of 1.2 metres at 33.72 g/t gold
Level 3: Level drive: 87 metres length at average width of
1.2 metres at 92.00 g/t gold
Sub-level: 82 metres length at average width
of 1.0 metres at 70.09 g/t gold
Table IV. Drill hole results >3g/t gold for holes MD 85 to 113 which
are included in the new resource estimate. GHV intersections are
marked with an #.
+------------------------------------------------------------------------+
| | | | | | | | Grade|
|Hole | East| North| Dip| Azimuth| From| Width| (uncut)|
| | | | (°)| (°)| (metres)| (metres)| (g/t|
| | | | | | | | gold)|
|------+--------+--------+-----+---------+----------+----------+---------|
|EAST | | | | | | | |
|------+--------+--------+-----+---------+----------+----------+---------|
|MD 87 | 614206| 912994| -43| 212| 224.75| 1.00|5.46 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 277.20| 5.00|3.50 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 289.00| 4.30|22.66 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 313.00| 1.00|23.19 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 347.10| 0.20|11.45 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 376.30| 2.00|29.20 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 388.90| 3.90|26.45 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 406.90| 0.60|11.65 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 413.60| 1.70|13.65 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 419.40#| 1.60#|19.55# |
|------+--------+--------+-----+---------+----------+----------+---------|
|MD 98 | 614150| 912993| -57| 210| 313.80| 1.10|5.10 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 340.45| 0.20|28.04 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 504.60| 0.20|4.37 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 508.70#| 4.90#|67.03# |
| | | | | | | |(*) |
|------+--------+--------+-----+---------+----------+----------+---------|
|MD 108| 613856| 912812| -54| 185| 249.40| 0.80|3.21 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 250.75| 0.35|5.80 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 371.95#| 0.25#|120.55# |
| | | | | | | |(*) |
|------+--------+--------+-----+---------+----------+----------+---------|
|MD 112| 614010| 912889| -65| 180| 245.20| 0.25|13.07 (*)|
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 252.75| 0.85|30.23 (*)|
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 331.00| 1.70|60.86 (*)|
|------+--------+--------+-----+---------+----------+----------+---------|
|WEST | | | | | | | |
|------+--------+--------+-----+---------+----------+----------+---------|
|MD 85 | 613587| 912868| -75| 180| 157.80| 0.30|11.44 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 183.50| 0.40|7.82 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 214.50| 1.30|9.23 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 257.00#| 2.50#|16.02# |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 264.30| 0.40|6.56 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 277.65| 1.05|8.09 |
|------+--------+--------+-----+---------+----------+----------+---------|
|MD 86 | 613737| 912855| -60| 190| 217.25#| 2.65#|113.80# |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 287.80| 0.50|33.26 |
|------+--------+--------+-----+---------+----------+----------+---------|
|MD 88 | 613546| 912850| -75| 195| 66.05| 1.10|20.04 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 69.70| 1.80|13.65 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 126.35| 1.85|16.61 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 219.20| 3.35|3.82 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 228.45| 1.15|3.71 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 264.20| 0.35|42.49 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 280.30| 5.00|4.59 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 328.20| 0.90|3.92 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 366.10#| 1.45#|97.62# |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 399.50| 0.85|13.79 |
|------+--------+--------+-----+---------+----------+----------+---------|
|MD 91 | 613477| 912845| -70| 205| 61.20| 2.40|4.47 (*) |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 69.10| 0.50|39.63 (*)|
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 198.40#| 1.00#|31.71# |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 287.95| 0.35|11.50 (*)|
|------+--------+--------+-----+---------+----------+----------+---------|
|MD 92 | 613544| 912844| -62| 196| 65.10| 1.15|4.52 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 193.30| 0.25|88.45 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 195.40#| 1.60#|61.05# |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 211.60| 0.75|14.97 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 278.70| 0.40|9.49 |
|------+--------+--------+-----+---------+----------+----------+---------|
|MD 97 | 613660| 912837| -65| 190| 151.50| 0.30|33.10 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 172.40#| 3.45#|43.26# |
| | | | | | | |(*) |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 195.60| 0.30|12.03 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 201.05| 0.20|40.76 (*)|
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 206.90| 1.30|7.31 (*) |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 295.90| 0.60|43.59 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 307.60| 0.30|6.73 |
|------+--------+--------+-----+---------+----------+----------+---------|
|MD 100| 613350| 912846| -72| 185| 119.70| 0.40|8.80 (*) |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 155.60| 2.50|17.31 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 218.30| 1.20|6.79 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 223.40#| 2.80#|31.09# |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 249.00| 0.75|7.57 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 267.00| 0.60|10.39 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 277.80| 1.20|4.89 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 343.80| 2.60|10.53 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 357.65| 1.00|5.49 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 362.00| 1.00|7.53 |
|------+--------+--------+-----+---------+----------+----------+---------|
|MD 103| 613663| 912782| -50| 196| 99.30#| 0.30#|28.29# |
|------+--------+--------+-----+---------+----------+----------+---------|
|MD 104| 613840| 912883| -60| 168| 202.00| 1.10|14.96 |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 258.65#| 2.25#|166.29# |
|------+--------+--------+-----+---------+----------+----------+---------|
|MD 111| 613766| 912841| -70| 180| 161.00| 0.60|4.50 (*) |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 190.50| 1.70|15.77 (*)|
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 248.85#| 2.25#|28.10# |
| | | | | | | |(*) |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 330.75| 0.25|9.57 |
|------+--------+--------+-----+---------+----------+----------+---------|
|MD 112| 614010| 912889| -65| 180| 245.20| 0.25|13.70 (*)|
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 252.75| 0.85|30.23 (*)|
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 331.00| 1.70|60.86 (*)|
|------+--------+--------+-----+---------+----------+----------+---------|
|MD 113| 613767| 912847| -81| 173| 187.40| 1.10|26.13 (*)|
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 420.45| 0.55|7.10 (*) |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 485.15| 0.55|4.15 (*) |
|------+--------+--------+-----+---------+----------+----------+---------|
| | | | | | 544.70| 1.00|5.93 (*) |
+------------------------------------------------------------------------+
Notes:
(i) (*) denotes Philsaga assays;
(ii) Independent laboratory McPhar assays are quoted in
preference to Philsaga assays;
(iii) Grid coordinates based on the Philippine Reference System
92;
(iv) Intersection lower cut-off grade is 3 g/t gold;
(v) Some previously reported intersection widths and grades may
have changed as a result of check assaying by McPhar.
Drilling is continuing with six surface rigs and 3 underground rigs.
Figure 3. (please see the link at the end of this announcement)
Composite diagram of the Co-O Mine area showing the projection of the
veins and locations of drill holes MD 85-113.
Figure 4. (please see the link at the end of this announcement) Co-O
Mine 3D model looking north.
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).
Detailed information on the Lingig porphyry copper prospect was
provided in a release dated 13 November 2007 and in the December 2007
quarterly report.
Initial drill results from the first hole, LIN 1, were provided in
the September 2008 quarterly report. This hole returned 83.9 metres
at 0.3% copper above mineralised porphyry compared to 98 metres at
0.27% Cu in DDH 1 in the same zone in 1974. Drilling with one rig is
continuing with some difficult ground conditions being encountered.
The geology is being revised through comprehensive new mapping as
previous maps have found to be inaccurate and not supported by
subsurface geology. On completion of this mapping, subsequent
interpretations and receipt of a back-log of assays, a comprehensive
update will be provided in March 2009.
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
Drilling has been completed at the Bananghilig area for the time
being. Detailed compilation of the results has been completed, and
subject to further interpretative work demonstrating good continuity
of mineralisation, an initial resource estimate may be undertaken.
KAMARANGAN PORPHYRY TARGET
An extensive area of weathered magnetite with secondary hematite
skarn mineralisation was located early in 2008. The area is also
marked by extensive alluvial gold workings from previous artisinal
sluicing operations. Detailed descriptions and results are contained
in an announcement dated 29 February 2008 and 14 August 2008.
The iron-rich skarn rocks, as well as other skarn types including
epidote-silica skarns and sulphide-rich skarns, and hornfels rocks
have been mapped as covering an area approximately 2,000 metres
east-west by > 800 metres north-south. The skarns are developed in
sub-vertical, banded limestones and associated sedimentary rocks.
Figure 2 (please see the link at the end of this announcement) shows
the location of the Kamarangan area in the Tambis-Barobo region.
Drill results from holes KAM 1 and 2 were provided in the September
2008 quarterly report indicating the presence of sub-ore grade copper
and molybdenum mineralisation in porphyry rocks and higher grades of
copper and gold in the magnetite-rich skarn rocks. Drilling is
continuing and a comprehensive report will be provided after the
initial drilling campaign which is estimated to be completed in
February.
Figure 9. (please see the link at the end of this announcement) Map
showing skarn types and the locations of drill holes KAM 1 and 2.
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 with one rig is continuing. Underground exploration
has been discontinued and drilling may be increased in 2009 if rigs
are available whilst the tenement application is progressed.
OTHER PROJECTS
Ø Abacus Project
The Mines Operating Agreement ("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 as shown on Figure 2 (please see the link at the end of
this announcement). The granting process for the Abacus EP is being
progressed.
The ridge and spur soil sampling described in the Tambis-Barobo
section above has covered the eastern parts of the tenement.
Ø Saugon Project
The Saugon regional ridge and spur soil sampling programme is
continuing.
Ø Bunawan Mining Corporation JV (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.
COMMUNITY PROGRAMMES
Work has commenced on a 16 bed hospital at the Co-O Mine and is
expected to be operational around mid-year. A helipad for emergency
evacuations will also be constructed adjacent to the hospital.
Construction of six new class rooms to be commenced at the Manabo
Village serving the Co-O Mine will be completed for the new school
year commencing in July.
The first full season of support for rice growers through
interest-free micro-loans is underway. Initial field trials have
established base line costs which have been incorporated into formal
agreements between the Company's Foundation and the rice
farmers.
CORPORATE
On 19 September 2008 Crosby Capital Limited ("Crosby") of Hong Kong
announced a proposal to make an unsolicited and highly conditional
takeover offer ("Offer Announcement") for the Company.
On 23 September 2008, the Medusa Board conducted an initial review of
the proposed offer as outlined in the Offer Announcement and advised
shareholders to take no action as the Board believed the offer was
inadequate and opportunistic.
On 3 November 2008 Crosby withdrew their offer.
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 Charles Hastie BAppSc (Mining
Engineering), B AppSc (Multidisciplinary Science), MAusIMM and Peter
Onley MBA, MSc, BSc (Hons), FAusIMM, CP. Mr Hastie and Mr Onley are
full-time employees of Golder Associates Pty Ltd.
Messrs Hastie and Onley have 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". Charles Hastie and Peter Onley consent
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.
LEAD AUDITOR'S INDEPENDENCE DECLARATION
The lead auditor's independence declaration under section 307C of the
Corporations Act 2001 is set out on page 15 for the half-year ended
31 December 2008.
This report is signed in accordance with a resolution of the Board of
Directors.
GEOFFREY J DAVIS
Managing Director
Dated this 4th day of March 2009.
CONDENSED INCOME STATEMENT
for the half-year ended 31 December 2008
Consolidated Entity
31 Dec 2008 31 Dec 2007
A$ A$
Revenue 20,169,951 6,164,793
Cost of Sales (7,628,898) (4,091,345)
Exploration and Evaluation Expense - (293,574)
Administration Expenses (1,838,256) (1,549,500)
Other Expenses (499,466) (1,825,794)
Profit/(loss) before income tax expense 10,203,331 (1,595,420)
Income tax (expense)/benefit 1,841,405 -
Profit/l(loss) for the period after income
tax expense 12,044,736 (1,595,420)
Overall operations:
Basic earnings per share $0.083 ($0.011)
Diluted earnings per share $0.077 n/a
The accompanying condensed notes form part of these financial
statements.
CONDENSED BALANCE SHEET
as at 31 December 2008
Consolidated Entity
31 Dec 2008 30 Jun 2008
Note A$ A$
CURRENT ASSETS
Cash & cash equivalents 5,736,734 4,834,161
Trade & other receivables 4,709,168 2,185,194
Inventories 1,694,968 935,976
Other current assets 373,867 333,119
TOTAL CURRENT ASSETS 12,514,737 8,288,450
NON-CURRENT ASSETS
Property, plant & equipment 32,462,322 28,499,551
Exploration and evaluation expenditure 39,933,163 28,292,304
Development expenditure 19,647,577 12,447,889
Deferred tax assets 1,401,362 2,851,792
TOTAL NON-CURRENT ASSETS 93,444,424 72,091,536
TOTAL ASSETS 105,959,161 80,379,986
CURRENT LIABILITIES
Trade & other payables 10,880,461 6,845,501
TOTAL CURRENT LIABILITIES 10,880,461 6,845,501
NON-CURRENT LIABILITIES
Deferred tax liability 1,901,640 5,217,720
Total Non-Current Liabilities 1,901,640 5,217,720
TOTAL LIABILITIES 12,782,101 12,063,221
NET ASSETS 93,177,060 68,316,765
EQUITY
Issued capital 6 66,946,550 65,866,550
Reserves 11,206,222 (529,337)
Retained profits 15,024,288 2,979,552
TOTAL SHAREHOLDERS' EQUITY 93,177,060 68,316,765
The accompanying condensed notes form part of these financial
statements.
CONDENSED STATEMENT OF CHANGES IN EQUITY
for the half-year ended 31 DECEMBER 2008
Option
Retained Premium Foreign
Share Profits / Reserve Currency
capital (Accumulated (refer Translation
Ordinary Losses) note 7) Reserve Total
A$ A$ A$ A$ A$
Balance at
01.07.2007 63,805,000 4,327,041 1,544,961 793,287 70,470,289
Shares
issued
during the
period 1,067,450 - - - 1,067,450
Share
options
recognised
during the
period in
accordance
with AASB 2
- Share
based
payments - - 1,009,600 - 1,009,600
Loss
attributable
to members
of parent
entity - (1,595,420) - - (1,595,420)
Transfer
from Option
Premium
Reserve 994,100 - (994,100) - -
Exchange
differences
arising on
translation
of foreign
subsidiaries - - - 1,881,699 1,881,699
Sub-total 65,866,550 2,731,621 1,560,461 2,674,986 72,833,618
Dividends
paid or
provided for - - - - -
Balance at
31.12.2007 65,866,550 2,731,621 1,560,461 2,674,986 72,833,618
Balance at
01.07.2008 65,866,550 2,979,552 1,722,692 (2,252,029) 68,316,765
Shares
issued
during the
period 1,080,000 - - - 1,080,000
Share
options
recognised
during the
period in
accordance
with AASB 2
- Share
based
payments - - 140,761 - 140,761
Profit /
(Loss)
attributable
to members
of parent
entity - 12,044,736 - - 12,044,736
Exchange
differences
arising on
translation
of foreign
subsidiaries - - - 11,594,798 11,594,798
Sub-total 66,946,550 15,024,288 1,863,453 9,342,769 93,177,060
Dividends
paid or
provided for - - - - -
Balance at
31.12.2008 66,946,550 15,024,288 1,863,453 9,342,769 93,177,060
+-------------------------------------------------------------------+
| The accompanying condensed notes form part of these financial |
| statements. |
+-------------------------------------------------------------------+
CONDENSED CASH FLOW STATEMENT
for the half-year ended 31 DECEMBER 2008
Consolidated Entity
31 Dec 2008 31 Dec 2007
A$ A$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 20,490,476 5,734,867
Payments to suppliers and employees (6,320,562) (5,946,771)
Interest received 23,527 248,659
Net cash provided by operating activities 14,193,441 36,755
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of non-current assets (2,330,054) (1,242,938)
Payments for exploration expenditure and (5,528,740) (4,666,166)
tenements
Payments for development activities (7,328,223) (2,776,237)
Payments relating to loan - (2,800,000)
Net cash (used in) investing activities (15,187,017) (11,485,341)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares 1,080,000 1,742,200
Transaction costs from issue of shares - (1,811,250)
Net cash provided by / (used in) 1,080,000 (69,050)
financing activities
Net increase / (decrease) in cash held 86,424 (11,517,636)
Cash at beginning of period 4,834,161 20,168,063
Exchange rate adjustments 816,149 138,289
Cash at end of period 5,736,734 8,788,716
The accompanying condensed notes form part of these financial
statements
CONDENSED NOTES TO THE FINANCIAL STATEMENTS
for the half-year ended 31 DECEMBER 2008
Note 1: Basis of preparation
Medusa Mining Limited (the "Company") is a company domiciled in
Australia.
The consolidated interim financial report of the Company as at and
for the six months ended 31 December 2008 comprises the Company and
its subsidiaries (together referred to as (the "Consolidated Entity")
and the consolidated entity's interests in associates and jointly
controlled entities.
The consolidated annual financial report of the consolidated entity
as at and for the year ended 30 June 2008 is available on the
company's website.
(a) Statement of compliance
The consolidated interim financial report is a general purpose
financial report which has been prepared in accordance with AASB 134:
Interim Financial Reporting, Australian Accounting Interpretations,
other authoritative pronouncements of Australian Accounting Standards
Board and the Corporations Act 2001.
The consolidated interim financial report does not include all of the
information required for a full annual financial report, and should
be read in conjunction with the consolidated annual financial report
of the consolidated entity as at and for the year ended 30 June 2008.
This consolidated interim financial report was approved by the Board
of Directors on 26 February 2009.
(b) Significant accounting policies
The accounting policies applied by the consolidated entity in this
consolidated interim financial report are the same as those applied
by the consolidated entity in its consolidated financial report as at
and for the year ended 30 June 2008.
(c) Estimates
The preparation of the interim financial report
requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual results
may differ from these estimates.
In preparing this consolidated interim financial
report, the significant judgements made by management in applying
the consolidated entity's accounting policies and the key sources of
estimation uncertainty were the same as those that applied to the
consolidated financial report as at and for the year ended 30 June
2008.
Determination of Ore Reserves and remaining life
The Company estimates its ore reserves and mineral
resources based on information compiled by Competent Persons (as
defined in accordance with the Australian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves as revised
December 2004 (the JORC code). Reserves determined in this way are
taken into account in the calculation of depreciation, amortisation,
impairment, deferred mining costs, rehabilitation and environmental
expenditure.
In estimating the remaining life of the mine for the purpose of
amortisation and depreciation calculations, due regard is given, not
only to the amount of remaining recoverable gold ounces contained in
proved and probable ore reserves, but also to limitations which could
arise from the potential for changes in technology, demand, and other
issues which are inherently difficult to estimate over a lengthy time
frame.
Where a change in estimated recoverable gold ounces contained in
proved and probable ore reserves is made, depreciation and
amortisation is accounted for prospectively.
The determination of ore reserves and remaining mine life affects the
carrying value of a number of the Consolidated Entity's assets and
liabilities including deferred mining costs and the provision for
rehabilitation. The company recently completed a new resource
estimation at the Co-O mine which increased the JORC compliant ounces
from 862,000 ounces to 1,203,000 ounces.
(d) Financial Risk Management
The consolidated entity's financial risk management objectives and
policies are consistent with that disclosed in the consolidated
financial report as at and for the year ended 30 June 2008.
CONDENSED NOTES TO THE FINANCIAL STATEMENTS
for the half-year ended 31 DECEMBER 2008
Note 2: Changes in Accounting
Estimate
The Group has reviewed its estimate of the effective tax rate which
is expected to be applicable to the various group entities for the
year ending 30 June 2009 and in future periods in which taxable and
deductible temporary differences are expected to reverse. Following
this change in estimate, the balances of the consolidated deferred
tax liability and deferred tax asset relating to temporary
differences and tax losses have been revised resulting in income tax
benefit for the period of $1,841,405. This amount includes a
write-back of previously recognised deferred tax liabilities of
$2,038,552 relating to the year ended 30 June 2008.
Consolidated Entity
31 Dec 2008 31 Dec 2007
A$ A$
Note 3: Profit/(Loss) for the period
The following revenue and expense items are
relevant in explaining the financial
performance for the interim period:
Revenue Items
- Interest revenue 21,703 270,305
- Gold and silver sales 20,147,924 5,895,663
Expense Items
- Depreciation 1,221,328 398,575
- Amortisation 792,636 919,744
- Employee benefits expense 560,680 535,946
- Exploration expenditure write off - 293,574
- Recognition of share based payments 140,761 133,600
Note 4: Dividends
No dividend was declared or paid by the Company since the last annual
reporting date.
Note 5: Segment Information
Primary reporting - geographical segment
Segment revenue:
- Australia 15,902 265,587
- Philippines 20,154,049 5,899,206
Total Revenue 20,169,951 6,164,793
Segment results - Profit/(loss):
- Australia (1,527,370) (1,962,255)
- Philippines 11,730,701 366,834
Profit/(loss) from ordinary activities 10,203,331 (1,595,421)
CONDENSED NOTES TO THE FINANCIAL STATEMENTS
for the half-year ended 31 DECEMBER 2008
Consolidated Entity
31 Dec 2008 30 Jun 2008 31 Dec 2008 30 Jun 2008
(shares) (shares) (A$) (A$)
Note 6: Issued
Capital
Ordinary shares on 146,307,548 145,057,548 66,946,550 65,866,550
issue
Opening balance 145,057,548 142,037,548 65,866,550 63,805,000
add -
Shares issued during 1,250,000 3,020,000 1,080,000 2,061,550
the period
146,307,548 145,057,548 66,946,550 65,866,550
Movement in ordinary
shares
during the half-year:
- Balance at 145,057,548 142,037,548 65,866,550 63,805,000
beginning of the
period
- Options converted - 3,000,000 - 1,729,200
to ordinary shares
at $0.5764 per share
- Options converted - 20,000 - 13,000
to ordinary shares
at $0.65 per share
- Options converted 250,000 - 180,000 -
to ordinary shares
at $0.72 per share
- Options converted 1,000,000 - 900,000 -
to ordinary shares
at $0.90 per share
- Transfer from - - - 994,100
option reserve
- Issue costs - - - (674,750)
146,307,548 145,057,548 66,946,550 65,866,550
Consolidated Entity
31 Dec 2008 30 Jun 2008 31 Dec 2008 30 Jun 2008
(options) (options) (A$) (A$)
Note 7: Option
Premium Reserve
Option Premium 10,400,000 12,401,446 1,863,453 1,722,692
Reserve
Opening balance 12,401,446 6,021,446 1,722,692 1,544,961
less -
Options converted/ (2,401,446) (3,020,000) - (994,100)
cancelled
add -
Options Issued - 7,400,000 - 295,831
Share options 400,000 2,000,000 140,761 876,000
recognised during the
period in accordance
with AASB 2 - Share
based payments
10,400,000 12,401,446 1,863,453 1,722,692
CONDENSED NOTES TO THE FINANCIAL STATEMENTS
for the half-year ended 31 DECEMBER 2008
Consolidated Entity
31 Dec 2008 30 Jun 2008 31 Dec 2008 30 Jun
2008
(options) (options) (A$) (A$)
Movement in
options
during the
half-year:
- Balance at 12,401,446 6,021,446 1,722,692 1,544,961
beginning of the
period
- Unlisted (1,250,000) (3,020,000) - (994,100)
options converted
to shares
- Unlisted - 7,000,000 - -
options
exercisable at
$1.60 each
- 630,000 - - - 56,464
Unlisted options
issued and
exercisable at
$1.25 each (0%
vested at balance
date)
- Options (1,151,446) - - -
cancelled
- Share options 400,000 2,400,000 140,761 1,115,367
recognised during
the period in
accordance with
AASB 2 - Share
based payments
10,400,000 12,401,446 1,863,453 1,722,692
Note 8: Contingent
Liabilities
Under a Heads of Agreement ("HOA") between Sierra Mining Limited
("SML") and Medusa signed in August 2007, Medusa had agreed to take a
9.9% placement in Sierra of 4.85 million shares (at an issue price of
A$0.25, totalling A$1.21 million) with 2.425 million unlisted
attaching options exercisable at A$0.30 each with an expiry date of 4
years from the date of completion of due diligence.
On 8 April 2008 Sierra advised the ASX that Sierra would not be
proceeding with the placement of 9.9% of Sierra shares to Medusa
under the HOA, and Medusa agreed not to take up the placement in an
announcement to the ASX and AIM markets.
Subsequently, on 23 June 2008, Sierra has made a claim against Medusa
relating to the HOA and has demanded that Medusa subscribes for the
securities. Medusa denies it has any obligation to take up the
proposed placement and will defend any legal proceedings that may be
commenced.
There have been no developments in the period since the annual
report.
Note 9: Commitments
There has been no change to the commitments as disclosed in the
entity's 30 June 2008 annual financial report.
Note 10: Related Parties
Arrangements with related parties continue to be in place. For
details on these arrangements, refer to 30 June 2008 annual financial
report.
Note 11: Events subsequent to
balance date
There has not arisen in the interval between the half-year ended 31
December 2008 and the date of this report any other item, transaction
or event of a material or unusual nature likely, in the opinion of
the Directors of the Company, to affect significantly the operations
of the Consolidated Entity, the results of those operations, or the
state of affairs of the Consolidated Entity, in subsequent financial
periods except for:
On 26 February 2009 the Company announced a placement of 20,300,000
fully paid ordinary shares at $1.21 each to institutional and
sophisticated clients of Euroz Securities Limited ("Euroz"). The
placement which was fully underwritten by Euroz raised gross proceeds
of $24.563 million.
CONDENSED NOTES TO THE FINANCIAL STATEMENTS
for the half-year ended 31 DECEMBER 2008
Note 12: Changes in Accounting
Policies
The following accounting policies were available for early adoption
but have not been applied in preparing these consolidated interim
financial statements.
* AASB 101 Presentation of Financial Statements (Revised 2007)
* AASB 8 Operating Segments
* AASB 123 Borrowing Costs (Revised 2007)
The adoption of AASB 101 (Revised 2007) is applicable for annual
reporting periods beginning on or after 1 January 2009. It makes
certain changes to the format and titles of the primary financial
statements and to the presentation of some items within these
statements. It also gives rise to additional disclosures. The
measurement and recognition of the Group's assets, liabilities,
income and expenses is unchanged. However, some items that were
recognised directly in equity will be recognised in other
comprehensive income, for example revaluation of property, plant and
equipment. AASB 101 affects the presentation of owner changes in
equity and introduces a 'Statement of comprehensive income'.
AASB 8 is applicable for annual reporting periods beginning on or
after 1 January 2009. It will not affect the identified operating
segments for the Group. Reported segment results are based on
internal management reporting information that is regularly reviewed
by the chief operating decision maker.
AASB 123 Borrowing Costs (Revised 2007) requires the capitalisation
of borrowing costs to the extent they are directly attributable to
the acquisition, production or construction of qualifying assets that
need a substantial period of time to get ready for their intended use
or sale. There will be no effect of the application of the new
standard given that the Group already capitalise borrowing costs
related to qualifying assets.
DIRECTORS' DECLARATION
The Directors of the Company declare that:
1. The financial statements and notes, as set out on pages 16 to
24:
(a) comply with Accounting Standard AASB 134: Interim
Financial Reporting and the Corporations Regulations; and
(b) give a true and fair view of the Consolidated Entity's
financial position as at 31 December 2008 and of its performance for
the half year ended on that date.
2. In the Directors' opinion there are reasonable grounds to
believe that the Company will be able to pay its debts as and when
they become due and payable.
This declaration is made in accordance with a resolution of the Board
of Directors.
GEOFFREY J DAVIS
Managing Director
Dated this 4 th day of March 2009
=--END OF MESSAGE---
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