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 <mailto:admin@medusamining.com.au>
Internet:www.medusamining.com.au <http://www.medusamining.com.au/>
ANNOUNCEMENT
18 January 2010
Co-O MINE RE-INTERPRETATION & CONCEPTUAL TARGET SIZE
Medusa Mining Limited(ASX & AIM: MML: TSX: MLL) ("Medusa" or the "Company"),
through its Philippines operating company, Philsaga Mining Corporation
("Philsaga"), advises that it has completed a re-interpretation of the resource
model for the Co-O Mine with the sole purpose of correcting inconsistencies to
the east of the Oriental Fault between previous drillhole based interpretations
and the on-going development on Level 5 from the Agsao Shaft. The revised
resource is JORC and NI 43-101 compliant. A large number of drill hole
intersections are yet to be included in the re-interpretated resource model.
This re-interpretation has marginally decreased the Inferred Resources but
maintained the Indicated Resources taking into account production and
stockpiles. This now provides an accurate development based model for expanding
the mine to the east. Thirty-five veins have now been modelled with resources
and more are expected to be identified. Future resource updates will be done
annually in June-July.
In addition, estimates of the conceptual potential target size** of the Co-O
Mine using various parameters indicate a range from 3,000,000 ounces in
9,300,000 tonnes to 7,000,000 ounces in 22,000,000 tonnes using a grade range of
9 to 11 g/t gold with a preferred average grade of the current resources of 10
g/t gold.
Table I.Mineral resource estimate at 9 December 2009.
+-----------+-----------------------------------------+
| Category | > 0 g/t gold |
| +-----------+----------+------------------+
| | tonnes | g/t gold | contained ounces |
+-----------+-----------+----------+------------------+
| Indicated | 1,450,000 | 12.3 | 580,000 |
+-----------+-----------+----------+------------------+
| Inferred | 2,290,000 | 9.0 | 660,000 |
+-----------+-----------+----------+------------------+
Geoff Davis, Managing Director of Medusa, commented:
"This re-interpretation based on on-vein development now provides a solid
foundation for growing the mineral resources on the east of the Oriental Fault.
Estimates of the conceptual potential target size** of Co-O indicate 3 to 7
million ounces of gold. On-going drilling and development is continuing with the
aim of unlocking this potential."
**The potential target size and grade is conceptual in nature, and there has
been insufficient exploration to define a mineral resource, and it is uncertain
if further exploration will result in the target being defined as a mineral
resource.
MINERAL RESOURCE MODEL
Discussion
The sole purpose of the re-interpretation was to correct inconsistencies to the
east of the Oriental Fault between previous drillhole based interpretations and
the on-going development on Level 5 from the Agsao Shaft.
Diamond drilling has continued since the resource model update announced on 1
July 2009 and focused on extending the Co-O vein system. A total of 52 drill
holes have been completed (as announced on 10 December 2009) since the previous
resource estimation and considered for inclusion in the re-interpreted resource
model in conjunction with available underground sampling data, and excluding
mined material.
Thirty five veins now have resources allocated to them, with a number of the new
veins, particularly the East Agsao series of veins, being open in almost all
directions. The vein system is open at depth.
It should be noted that a large number of drill holes in a number of areas shown
on Figure 2(please see the link at the end of this announcement) are still to be
included in resource estimates, and will be included as the confidence levels
increase and demonstrated continuity improves through additional drilling and/or
development.
As a result of extensive development from the bottom of the Agsao Shaft (Level
5) since the last resource estimate, this new wireframe model has corrected
previously noted (see announcement of 1 July 2009) inconsistent vein
orientations on the east side of the Oriental Fault. It is now clear from the
underground development that the vein system continues in an easterly direction,
disrupted in places by north-trending step-faulting, which generally down-throws
the veins on the east side of each fault. Re-interpretation as straight veins
has resulted in some inferred resources loss compared to the previous
interpretation of curved veins which was based solely on drill hole data.
Figure 1(please see the link at the end of this announcement) shows the updated
3D resource model. The veins are open at depth and currently only limited by the
depth and density of drilling.
Figure 2(please see the link at the end of this announcement) is the composite
map of the Co-O Mine area showing the projection of veins onto Level 5. This
also shows areas where additional drilling/development is required to complete
the definition/extension of known veins and to increase definition around
existing drill hole intersections which are not yet included in the model.
Figure 3(please see the link at the end of this announcement) shows all the
current development in the mine and Table II is a summary of the major veins.
Table II.Co-O Mine mineral resource estimates for the major veins.
+------------------+-----------+-----------------------------------------+
| | | > 0 g/t gold |
| Vein name | Category +-----------+----------+------------------+
| | | tonnes | g/t gold | contained ounces |
+------------------+-----------+-----------+----------+------------------+
| Central | Indicated | 342,000 | 9.57 | 110,00 |
| | | | | |
| | Inferred | 250,000 | 3.27 | 26,000 |
+------------------+-----------+-----------+----------+------------------+
| Jereme | Indicated | 97,000 | 14.53 | 45,000 |
| | | | | |
| | Inferred | 93,000 | 7.81 | 23,000 |
+------------------+-----------+-----------+----------+------------------+
| Jereme Footwall | Indicated | 82,000 | 16.84 | 44,000 |
| | | | | |
| | Inferred | 73,000 | 12.73 | 30,000 |
+------------------+-----------+-----------+----------+------------------+
| Great Hamish | Indicated | 188,000 | 21.16 | 130,000 |
| | | | | |
| | Inferred | 191,000 | 10.79 | 66,000 |
+------------------+-----------+-----------+----------+------------------+
| Great Hamish FW | Indicated | 170,000 | 11.42 | 63,000 |
| | | | | |
| | Inferred | 196,000 | 12.21 | 77,000 |
+------------------+-----------+-----------+----------+------------------+
| Roysan | Indicated | 96,000 | 23.10 | 71,000 |
| | | | | |
| | Inferred | 98,200 | 23.29 | 73,000 |
+------------------+-----------+-----------+----------+------------------+
| Catto 1 | Indicated | 56,000 | 18.28 | 30,000 |
| | | | | |
| | Inferred | 54,000 | 18.99 | 33,000 |
+------------------+-----------+-----------+----------+------------------+
| East Agsao 4 | Inferred | 196,000 | 12.01 | 76,000 |
+------------------+-----------+-----------+----------+------------------+
| Other veins | Indicated | 420,000 | 6.50 | 90,000 |
| | | | | |
| | Inferred | 1,140,000 | 7.10 | 260,000 |
+------------------+-----------+-----------+----------+------------------+
| Total Indicated | 1,450,000 | 12.3 | 580,000 |
+------------------------------+-----------+----------+------------------+
| Total Inferred | 2,290,000 | 9.0 | 660,000 |
+------------------------------+-----------+----------+------------------+
The resource estimations have been undertaken by Cube Consulting Pty Ltd ,
2010.
Note: Rounding may result in some slight discrepancies in totals.
Resource drilling is continuing with the aim of increasing confidence levels for
interpretation in some areas which will result in the inclusion of more drill
hole intersections as well as extensions to the vein system.
Stockwork/stringer mineralisation
At the western end of the mine, preliminary work suggests the possible presence
of a number of stockwork or stringer zones where narrow quartz veins over widths
of 5 to 6 metres have been developed. One of these has been defined as
approximately 40 metres long within the Great Hamish Vein. An Alimak rise within
this zone has been completed between Levels 2 and 3 demonstrating continuity and
that it is open above and below these levels. Two early bulk samples tested
through the mill returned head grades of 14 and 17 g/t gold. Alimak long-hole
stoping (much cheaper than shrink stoping) is about to commence in this zone and
will be employed if other similar zones are defined.
Other potentially similar stockwork or stringer zones may be present in parts of
other veins and a similar zone outcrops near the Tinago Shaft which will be
subject to additional exploration. A drive to connect the Baguio Shaft and the
Tinago Shaft on Level 3 is underway and expected to allow underground assessment
of previous drill hole TIN 3 with a similar interpreted style adjacent to the
Central Vein and between Levels 2 and 3. It returned two close spaced
intersections of 3.80 metres at 21.15 g/t gold and 6.60 metres at 2.45 g/t gold
(see announcement dated 28 February 2007).
Specific gravity
A programme of specific gravity ("SG") measurements is underway for the lower
levels of the mine. Initial results indicate that the currently used SG of 2.45
may be conservative. This programme should be completed before the next resource
estimate.
Vein modelling
Cube Consulting Pty Ltd of Perth, Western Australia was contracted to undertake
the resource estimations. A wireframe model of the vein system and the mine
depletions were based on all available information as at 7 December 2009. A 2D
longitudinal modelling approach was used and is based on an accumulation
variable incorporating mineralised vein horizontal width and intercept grade.
Variography was used to analyse the spatial continuity of the horizontal width
and accumulation variables within the mineralised veins and to determine
appropriate estimation inputs to the interpolation process. The accumulation
variables were interpolated into blocks using Ordinary Kriging. High grade
limits were applied to gold prior to the calculation of the accumulation
variable. Mineral resources have been reported in accordance with The 2004
Australasian Code for Reporting of Mineral Resources and Ore Reserves (JORC
Code) and Canadian National Instrument 43-101.
Co-O MINE CONCEPTUAL TARGET SIZE **
Estimates (Table III) have been undertaken for the Co-O Mine conceptual target
size** based on a drill-defined strike length of approximately 1,500 metres and
up to 2,000 metres based on potential extensions.
Aggregate across-strike widths of the veins of 5 and 8 metres (ie, adding the
width of each individual vein across strike to give an aggregate vein width) are
regarded as possibly conservative. Depths of between 500 and 750 metres below
Level 1 (adit level) in the mine are regarded as geologically reasonable as a
few deeper drill holes below 400 metres below Level 1 have intersected good
grade mineralisation.
The estimate used a grade range of 9 to 11 g/t gold with a preferred average
grade of the current resources of 10 g/t gold.
Table III.Co-O Mine conceptual target parameters and estimates **
+---------+-----------+----------+----------+-----+--------------------+
|Strike |Depth below| Aggregate|Conceptual| Gold|Conceptual contained|
|length | Level I|Vein width| tonnes|grade| ounces|
|(metres) | (metres)| (metres)| |(g/t)| |
+---------+-----------+----------+----------+-----+--------------------+
|1,500 | 500| 5| 9,375,000| 10| 3,125,000|
| | +----------+----------+-----+--------------------+
| | | 8|14,700,000| 10| 4,725,000|
| | +----------+----------+-----+--------------------+
| | | 10|18,750,000| 10| 6,250,000|
| +-----------+----------+----------+-----+--------------------+
| | 750| 5|15,000,000| 10| 5,000,000|
| | +----------+----------+-----+--------------------+
| | | 8|22,050,000| 10| 7,000,000|
| | +----------+----------+-----+--------------------+
| | | 10|30,000,000| 10| 10,000,000|
| +-----------+----------+----------+-----+--------------------+
| | 1000| 5|18,750,000| 10| 6,250,000|
| | +----------+----------+-----+--------------------+
| | | 8|29,400,000| 10| 9,450,000|
| | +----------+----------+-----+--------------------+
| | | 10|37,500,000| 10| 12,500,000|
+---------+-----------+----------+----------+-----+--------------------+
|2,000 | 500| 5|12,500,000| 10| 4,160,000|
| | +----------+----------+-----+--------------------+
| | | 8|19,600,000| 10| 6,300,000|
| | +----------+----------+-----+--------------------+
| | | 10|25,000,000| 10| 8,125,000|
| +-----------+----------+----------+-----+--------------------+
| | 750| 5|20,000,000| 10| 6,660,000|
| | +----------+----------+-----+--------------------+
| | | 8|29,400,000| 10| 9,450,000|
| | +----------+----------+-----+--------------------+
| | | 10|40,000,000| 10| 10,330,000|
| +-----------+----------+----------+-----+--------------------+
| | 1,000| 5|25,000,000| 10| 8,125,000|
| | +----------+----------+-----+--------------------+
| | | 8|39,200,000| 10| 10,200,000|
| | +----------+----------+-----+--------------------+
| | | 10|50,000,000| 10| 16,250,000|
+---------+-----------+----------+----------+-----+--------------------+
Notes:
(i) SG of 2.45 used for all estimates;
(ii) Estimates rounded to nearest 1000; and
(iii) Highlighted cases indicate most geologically reasonable based on
current knowledge
** The potential target size and grade is conceptual in nature, and there has
been insufficient exploration to define a mineral resource, and it is uncertain
if further exploration will result in the target being defined as a mineral
resource.
Geoff Davis
Managing Director
Information in this report relating toExploration Results is based on
information compiled by Mr Geoff Davis, who is a member of The Australian
Institute of Geoscientists. Mr Davis is the Managing Director of Medusa Mining
Limited and has sufficient experience which is relevant to the style of
mineralisation and type of deposits under consideration and to the activity
which he is undertaking to qualify as a "Competent Person" as defined in the
2004 Edition of the "Australian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves" and is a "Qualified Person" as defined in
"National Instrument 43-101" of the Canadian Securities Administrators. Mr
Davis consents to the inclusion in the report of the matters based on his
information in the form and context in which it appears.
Information in this report relating toMineral Resources has been estimated and
compiled by Mark Zammit of Cube Consulting Pty Ltd of Perth, Western Australia.
Mr Zammit is a member of The Australasian Institute of Mining & Metallurgy and
has sufficient experience that is relevant to the style of mineralisation and
type of deposit under consideration and to the activity which he is undertaking
to qualify as a Competent Person as defined in the 2004 Edition of the
"Australian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves" and is a "Qualified Person" as defined in "National Instrument
43-101" of the Canadian Securities Administrators. Mr Zammit consents to the
inclusion in the report of the matters based on his information in the form and
context in which it appears.
Refer to the Technical Report which was filed onwww.sedar.com
<http://www.sedar.com/> in November 2009 for further discussion of the Co-O
Deposit's geology, structural controls, drilling, sampling and assaying
information, and any known material environmental, permitting, legal, title,
taxation, socio-political, marketing or other relevant issue.
A revised Technical Report will be lodged with Sedar within 45 days of this
announcement.
ABOUT MEDUSA MINING LIMITED
Medusa Mining Limited("Medusa" or the "Company"), a public company listed on the
ASX, AIM and the TSX, is an Australian based gold producer, focussed solely on
the Philippines.
With current mineral resources comprising Indicated 580,000 ounces of gold and
Inferred 1,310,000 ounces of gold, Medusa's corporate strategy is to become a
mid tier 300,000 to 400,000 ounce per year, low cost gold producer.
The Company is currently expanding its high grade Co-O Mine operations
(Indicated Resources 580,000 ounces of gold inclusive of a Probable Reserve of
500,000 ounces of gold, and Inferred Resources 660,000 ounces of gold) to
increase its forecast production to 100,000 ounces per year in 2010, and is
conducting near mine exploration to assess the possibilities of further
expansion to 200,000 ounces per year. Current cash costs at the Co-O Mine are
approximately US$200 per ounce.
A pipe-line of deposits is now being established with the Bananghilig Deposit
(Inferred Resource of 650,000 ounces of gold) recently added and which is
expected to expand, potentially in conjunction with nearby discoveries.
Further potential upside exists in the discovery of substantial copper deposits
within the tenement holding of > 800km2.
For further information please contact:
Australia
Medusa Mining Limited +61 8 9367 0601
Geoffrey Davis, Managing Director
Roy Daniel, Finance Director
United Kingdom
Fairfax I.S. PLC +44 (0)20 7598 5368
Nominated Adviser/Joint Broker
Ewan Leggat
Lothbury Financial +44 (0)20 7011 9411
Michael Padley/Libby Moss
Canada
Nicholas Sayce, Investor Relations +1 416 822 4404
[HUG#1374154]
Co-O Mine Re-Interpretation and Conceptual Target Size: http://hugin.info/138050/R/1374154/336815.pdf
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