TIDMMML
RNS Number : 8430B
Medusa Mining Limited
23 April 2012
Medusa Mining Limited
("Medusa" or the "Company")
QUARTERLY ACTIVITIES REPORT
PERIOD ENDED 31 MARCH 2012
23 April 2012
Snapshot of Medusa:
- Un-hedged, low cost, dividend paying gold producer focused on organic growth in the Philippines
- Growth path to production of 400,000 ozs per year by end 2015/early 2016
- Growth underpinned by strong cashflow from Co-O Mine (narrow vein underground)
- FY 2011/12: revised production guidance of 60-65,000 ozs at cash costs circa US$250/oz
- Current Mineral Resources comprise
- Co-O Mine: Indicated 616k ozs at 12.0 g/t gold; Inferred 1,344k ozs at 8.8 g/t gold
- Bananghilig: Inferred 650k ozs at 1.3 g/t gold
- Current Probable Reserves: Co-O Mine 502k ozs @ 10.1 g/t gold
- Co-O Mine Resources and Reserves to be maintained at current levels
- Conceptual exploration target size ** of Co-O Mine of 3 to 7 million ozs
- Excellent exploration upside: high grade vein and disseminated
bulk gold targets, plus seven copper targets
- 820 km2 of tenements and exploration revised budget for FY 2011/12 of US$30M
** 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. Refer to Stock
Exchange announcement dated 24 August 2011.
Board of Directors:
Geoffrey Davis (Non-executive Chairman)
Peter Hepburn-Brown (Managing Director)
Ciceron Angeles (Non-executive Director)
Robert Weinberg (Non-executive Director)
Andrew Teo (Non-executive Director)
Capital Structure:
Ordinary shares: 188,903,911
Unlisted options: 1,715,000
Performance rights: 250,000
Listings:
ASX and LSE (Code: MML)
Address and Contact Details:
PO Box 860
Canning Bridge WA 6153
Telephone: +618 9367 0601
Facsimile: +618 9367 0602
Email: admin@medusamining.com.au
Website: www.medusamining.com.au
OVERVIEW:
Co-O MINE PRODUCTION & DEVELOPMENT
- New Mill: construction commenced, all long lead time items on schedule.
- Production: 18,258 ounces at a recovered grade of 8.1 g/t gold
and cash costs of US$239 per ounce. Production influenced by
accelerated development and operational disruptions by leach tank
tilting and continued torrential rainfall over the New Year
period.
- Saga Shaft: currently at 264 metres on its way to Level 8 (350
metres below surface) to install loading facilities. Completion
estimated Q4 in CY12. Production influenced by high percentage of
development ore produced to support Level 8 development.
- Emergency assistance: two mine rescue teams assisted at the
Negros Island earthquake area in February.
Co-O MINE EXPLORATION
- Drilling is continuing with six surface and five underground
rigs. Exploratory drilling of two vertical holes to 1,200 metres
for new deep vertical shaft to the east of the Agsao Shaft
completed.
- Drill results include: 1.90 metres at 79.18 g/t gold, 2.00
metres at 93.40 g/t gold, 1.90 metres at 79.94 g/t gold, 0.80
metres at 377.24 g/t gold, 8.50 metres at 89.17 g/t gold and 2.40
metres at 159.23 g/t gold. Deepest intersection to date at 1,076
metres vertical of 1.00 metre at 10.39 g/t gold.
TAMBIS AREA - BANANGHILIG DEPOSIT
- Infill resource drilling in progress with seven rigs with the
aim of upgrading majority of resources to Indicated category.
Infill drilling should be completed in late August 2012
- An updated Inferred resource is planned for the September
quarter followed by an Indicated resource and reserve when the
infill drilling is completed.
SAUGON and LINGIG PROJECTS
- Saugon IP survey completed and Lingig in preparation.
ANOLING
- Drilling with four rigs is on-going.
CORPORATE & FINANCIALS (unaudited)
- Total cash, cash equivalent in gold on metal account and
bullion at end of quarter of approximately US$71.3 million.
- An interim dividend of A$0.05 per share was paid to shareholders on 23 March 2012.
PROJECT OVERVIEW
The locations of the Company's projects are shown on Figures 1
and 2 (please see link at the end of this announcement).
Co-O MINE
Gold Production
The production statistics for the March 2012 quarter with
comparatives for the previous three quarters as well as the
year-to-date production statistics are summarised in Table I
below.
Table I. Gold production statistics
Unit Qtr ended Qtr ended Qtr ended Qtr ended YTD
31 Mar 31 Dec 30 Sep 30 Jun 31 Mar
12 11 11 11 12
Tonnes mined WMT 85,748 71,872 41,596 69,562 199,216
Ore milled DMT 76,002 68,008 42,152 76,365 186,162
Recovered grade gpt 8.10 8.00 8.33 11.05 8.10
Recovery % 92% 93% 93% 93% 93%
Gold produced ozs 18,258 16,270 10,510 25,233 45,038
Cash costs (1) US$/oz $239 $242 $291 $194 $252
Gold sold ozs 10,000 10,000 15,446 21,423 35,446
Average gold price
received US$ $1,738 $1,761 $1,587 $1,518 $1,679
Note:
(1) Net of development costs and includes royalties and local
business taxes
Gold production for the quarter was 18,258 ounces, at an average
recovered grade of 8.10 g/t gold and cash costs of US$239 per
ounce, inclusive of royalties and local business taxes.
As previously advised to the market, the mine continues to
operate predominantly in development mode to prepare for the future
production increase and all development ore mined to date has been
treated through the mill. The increased amount of development ore
treated is the primary reason for the lower recovered grade for the
past three quarters, compared to quarters from the previous
years.
Disruption to production during the quarter was experienced
following the passing of tropical storm Sendong (see announcement
19 December 2011) followed by continued torrential rain over the
Christmas and New Year period. As a consequence of this disruption
over several weeks, in combination with the accelerated development
program currently undertaken to prepare for the future production
increase and the decision to sink the Saga Shaft to Level 8
(previous target Level 6) and the tilting of four leach tanks as
reported on 21 March 2012, the Company has since revised its
production guidance to between 60,000 to 65,000 ounces for the
financial year.
Cash costs per ounce for the quarter has improved marginally to
US$239 per ounce (YTD: US$252 per ounce), and the Company
anticipates, that the unit costs will now average circa US$250 per
ounce for the year following the latest production guidance.
Medusa, an un-hedged gold producer, sold 10,000 ounces of gold
at an average price of US$1,738 per ounce during the quarter.
Preliminary Development Timetable
Graph 1 (please see link at the end of this announcement) is the
updated Preliminary Development Timetable and Production Guidance
for the new Co-O Mill followed by the Bananghilig Project.
The total estimated Capex (inclusive of mine development and
shaft sinking) for the Phase 3 expansion of Co-O is US$70 million
which will funded entirely from the Company's cash flow.
New Co-O Mill
In November 2010, the Board approved the construction of a new
mill with capacity to produce 200,000 ounces of gold per year based
on processing up to 750,000 tonnes per year at the current reserve
grade of the Co-O Mine.
The application to upgrade the Environmental Clearance
Certificate for the current Co-O Mill to 2,500 tonnes per day
awaits signing in Manila pending completion of the mining industry
policy review.
Operations
Mine Development
Major renovations are continuing at the Co-O Mine to modernise
the mine for its expanded production.
Acceleration of the lateral development is on-going to ensure
the underground infrastructure and on-vein development will be in
place for the Saga Shaft. This accelerated development reached a
new record during the quarter and consequently increased the
proportion of development ore supplied to the mill which is
expected to continue to comprise the majority of the mill feed
during this accelerated development period.
Sinking of the Saga Shaft progressed smoothly, and is currently
at 264 metres depth. It is anticipated that the Saga Shaft will be
completed during the December quarter 2012 and hauling from Level 8
should commence shortly thereafter.
Mine Production
The haul road repairs were completed during the quarter, and the
haul road will be further upgraded during the year as part of the
expansion plans and to cater for increased truck traffic.
Ore trucked to the mill during the quarter was development ore
and some stope ore.
The re-optimisation of the sinking of the Saga Shaft to Level 8
will mean that the high rate of development will continue until
this shaft is completed, continuing the high percentage of
development ore in the mill feed. Once the Saga Shaft is completed
with an estimated haulage capacity to 1,500 tonnes per day, then it
will be possible to increase the amount of stope ore that is hauled
and processed.
The average development metres has increased by 18% and at the
end of March, there were 68 development headings of which 54
headings were following veins. Haulage through the current shafts
increased by 10% during the quarter.
Mill Expansion
The current status of activities is:
- Rectification work for leach tank tilting is underway (see announcement dated 21 March 2012)
- Construction of a new large leach tank is underway;
- Planned re-furbishment of four small leach tanks re-scheduled;
- Site works for the construction of new crushing and grinding
sections (separate from the current crushing and grinding sections)
commenced;
- Upgrading of the thickener and the elution circuit on-going; and
- Tailings dam number 5 completed.
Exploration
Recent statistical studies undertaken by Carras Mining Pty Ltd
indicate that 3 to 5 holes out of every 10 holes in a particular
vein are required to return ore-grades to indicate that the vein
will be mineable.
Drilling with six surface rigs and five underground drilling
rigs is continuing. Drilling of two vertical holes located east of
the Agsao River to rig capacity of 1,200 metres completed.
Planning is underway for an extensive regional Induced
Polarisation/Resistivity ("IP/Res") and ground magnetics programme
around the Co-O Mine.
Drilling results
Detailed information is contained in the announcement dated 16
April 2012 which lists intersections down to 0.2 metres downhole
width since 18 October 2011.
Figure 3 (please see link at the end of this announcement) shows
the locations of the recently completed surface drill holes EXP111
to EXP145 comprising 35 holes for a total of 25,152 metres. Table
II lists the EXP surface diamond drill hole results >=3 g/t gold
over >=0.5 metres downhole. Assay results are awaited for holes
EXP138 to EXP145.
Holes EXP127 to 1,201 metres and EXP133 to 1,200 metres were
completed to test for possible deep shaft positions. Hole EXP127
intersected a number of ore-grade veins, however EXP133 did not
intersect any significant veins for its entire length.
Figure 4 (please see link at the end of this announcement) shows
the locations of the recently completed underground drill holes
totalling 14,023 metres in 66 holes. Table III lists underground
drill hole results >=3 g/t gold over >=0.5 metres received
since 27 October 2011 as well as some previously completed holes
whose locations are also shown in Figure 2 (please see link at the
end of this announcement). Assays are awaited for holes L2-051 to
L2-053, L2-055 to L2-057, L3-022, L3-027, L3-028, L5-087, L5-088,
L5-091 to L5-096, L5-105, L5-106, L6-023, L6-025, and LM-011.
Table II. Surface drill hole results > 3 g/t gold and >=
0.5 metres downhole for previously completed holes EXP102 to 110
and new holes EXP111 to EXP145.
Hole number East North Dip Azimuth From Width Grade (uncut)
([deg]) ([deg]) (metres) (metres) (g/t gold)
EXP103 614203 913145 -66 180 34.40 0.80 8.13*
EXP105 614670 913306 -50 160 434.40 1.00 3.83*
534.20 0.95 22.27*
675.30 0.60 4.70*
EXP106 614867 913453 -50 160 644.90 1.45 7.39*
697.40 2.05 14.47*
743.60 1.00 11.30*
EXP107 614108 913265 -60 180 556.90 0.80 21.27*
EXP108 614630 913331 -50 160 73.10 1.90 79.18*
450.80 1.00 5.33*
562.80 0.65 49.37*
576.20 0.70 17.97*
654.50 0.65 10.73*
667.40 1.10 3.54*
693.80 1.10 4.78*
713.45 0.65 3.14*
784.20 1.25 3.32*
EXP111 614041 913225 -57 160 160.05 1.65 8.03*
403.55 0.70 3.96*
EXP112 614172 912957 -48 160 354.00 0.55 33.37*
411.65 1.40 30.66*
EXP113 614928 913453 -50 160 615.45 1.00 4.25*
658.55 0.65 7.47*
EXP114 614442 912987 -50 180 325.75 1.75 4.97*
425.20 0.90 3.33*
430.95 1.45 7.73*
461.80 1.00 4.10*
523.40 1.15 12.94*
EXP116 614107 913162 -50 180 360.00 0.80 8.40*
482.40 0.85 83.33*
497.60 1.65 3.10*
567.30 0.95 4.43*
672.30 1.15 53.70*
EXP117 614507 913213 -53 180 423.95 1.45 4.82*
580.05 0.50 5.13*
597.25 1.00 3.38*
602.65 1.00 13.27*
770.50 1.60 7.01*
812.50 0.90 3.96*
Hole number East North Dip Azimuth From Width Grade (uncut)
([deg]) ([deg]) (metres) (metres) (g/t gold)
EXP118 614134 912960 -50 160 244.40 2.20 16.39*
314.05 0.80 36.17*
396.90 2.40 15.79*
EXP119 613899 913105 -53 160 56.75 1.65 6.01*
69.90 1.40 3.07*
152.65 0.65 4.10*
166.35 0.65 3.70*
277.60 2.50 3.17*
300.25 0.70 3.67*
347.10 1.35 7.05*
352.35 2.45 3.84*
409.85 3.30 3.88*
480.25 1.00 15.70*
518.45 0.55 9.59*
EXP120 614586 913271 -50 160 474.40 2.35 10.53*
488.35 1.20 5.33*
EXP121 614551 912992 -55 180 314.40 2.10 9.78*
573.30 4.80 13.04*
580.15 6.00 16.01*
EXP124 614549 913123 -52 160 452.05 1.35 7.09*
463.85 2.90 20.16*
783.55 1.75 17.01*
EXP125 614044 912858 -59 160 247.65 1.00 17.27*
319.85 0.95 9.00*
EXP127 614551 912592 0 -90 1055.80 0.90 3.30*
1076.40 1.00 10.39*
EXP128 614394 913026 -60 180 306.30 3.80 7.24*
366.85 0.70 22.17*
EXP118 614134 912960 -50 160 244.40 2.20 16.39*
314.05 0.80 36.17*
396.90 2.40 15.79*
EXP134 614604 913032 -65 180 495.20 0.50 8.75*
500.00 1.55 25.08*
653.60 2.00 93.40*
719.80 2.40 5.39*
815.70 3.50 37.50*
898.30 3.80 6.70*
922.10 1.30 36.78*
EXP136 614655 913101 -57 180 321.05 0.65 14.43*
413.30 0.65 9.00*
455.40 1.30 11.27*
521.70 1.90 79.94*
657.40 1.00 5.67*
771.75 1.05 3.40*
EXP137 614744 913100 -60 180 564.90 0.60 9.47*
Notes:
(i) Intersection widths are downhole drill widths not true
widths;
(ii) Assays denoted by (*) are by Philsaga Mining Corporation's
laboratory, all other assays are by McPhar Geoservices Inc. in
Manila;
(iii) Grid coordinates based on the Philippine Reference System
92.
Table III. Underground drill hole results >= 3 g/t gold and
>= 0.5 metres downhole.
Hole number East North Dip Azimuth From Width Grade (uncut)
([deg]) ([deg]) (metres) (metres) (g/t gold)
LEVEL 2
L2-054 613279 912925 3 356 70.55 0.75 10.00*
L2-057 613275 912928 0 61 20.90 1.00 4.41*
Hole number East North Dip Azimuth From Width Grade (uncut)
([deg]) ([deg]) (metres) (metres) (g/t gold)
LEVEL 3
L3-021 614103 913045 3 350 69.00 0.95 11.47*
LEVEL 5
L5-070 613951 912921 -47 138 30.65 0.55 3.10*
33.55 0.50 3.27*
143.95 1.80 9.27*
L5-075 614143 912935 -33 166 278.40 0.60 44.07*
L5-077 614146 912933 -33 55 277.45 0.55 25.57*
307.60 1.25 7.02*
L5-078 614146 912931 -33 160 71.90 1.35 27.23*
76.85 1.60 69.11*
L5-079 613950 912925 -60 9 26.95 6.55 6.45*
80.60 0.60 15.21*
L5-081 613948 912924 -60 335 46.60 0.80 7.40*
93.90 1.10 9.50*
L5-082 614146 912932 -47 59 147.85 0.60 37.26*
L5-083 613947 912923 -60 333 139.90 1.15 3.93*
L5-084 614146 912933 -47 54 127.60 0.50 99.17*
135.40 0.55 3.95*
143.25 2.05 25.01*
L5-085 613947 912923 -47 321 23.00 0.50 3.55*
L5-086 614145 912933 -47 231 121.65 1.95 8.42*
L5-087 613950 912925 -60 8 25.50 0.70 4.80*
82.70 4.15 4.37*
127.55 0.70 3.32*
L5-089 613951 912923 -60 200 68.65 0.75 7.00*
74.40 5.00 8.23*
132.80 0.55 6.13*
L5-090 613951 912922 -60 323 15.90 1.65 7.14*
97.10 1.80 27.44*
102.85 1.15 63.00*
L5-091 613615 912851 0 63 244.30 0.50 4.85*
L5-097 613951 912924 -40 13 14.60 0.80 377.24*
24.60 3.20 4.58*
51.95 1.85 4.54*
L5-098 613950 912925 0 206 5.90 0.60 9.49*
12.70 0.90 10.34*
26.95 1.20 5.79*
59.50 1.25 7.72*
L5-099 613612 912854 0 6 38.90 0.75 3.25*
58.80 0.65 4.56*
L5-100 613949 912924 -40 186 4.40 8.50 89.17*
57.50 3.50 9.86*
51.55 10.85 16.52*
269.85 0.55 6.74*
L5-101 613612 912855 0 206 49.30 0.70 12.87*
L5-102 613948 912924 -43 356 5.40 0.50 11.80*
10.65 3.55 6.14*
56.30 3.55 9.07*
61.30 3.05 3.40*
64.00 0.50 7.33*
76.90 0.65 4.83*
349.00 0.80 19.00*
Hole number East North Dip Azimuth From Width Grade (uncut)
([deg]) ([deg]) (metres) (metres) (g/t gold)
L5-103 613947 912923 0 342 4.65 1.35 5.97*
12.70 1.70 28.66*
43.00 0.65 4.73*
196.90 0.90 8.02*
LEVEL 6
L6-005 614096 912732 3 177 35.05 0.70 54.92*
L6-009 614056 912834 3 53 3.45 1.00 72.50*
61.60 1.10 12.80*
68.00 1.00 4.93*
L6-010 614055 912831 3 120 32.80 2.40 159.23*
43.70 0.60 4.53*
100.50 3.80 4.25*
106.55 2.75 3.72*
L6-011 614055 912831 3 116 39.75 1.85 12.50*
L6-012 614054 912836 3 21 58.85 1.05 3.41*
L6-013 614053 912836 3 358 9.35 3.20 5.93*
47.10 0.55 40.00*
L6-014 614052 912836 3 347 78.05 1.75 7.57*
L6-015 614051 912836 3 339 23.45 0.50 5.13*
59.85 0.50 3.87*
91.80 0.60 4.49*
115.65 2.15 4.95*
120.70 1.00 3.23*
123.60 1.00 3.04*
L6-016 614050 912836 3 148 22.25 2.95 3.22*
30.70 0.90 20.13*
L6-017 613963 613963 3 221 68.00 2.10 4.22*
L6-018 613958 912841 3 259 51.80 2.10 9.65*
L6-019 613961 912848 3 200 56.50 0.70 9.33*
L6-020 613960 912844 3 241 27.20 0.55 6.40*
92.37 0.59 20.62*
107.20 0.69 8.72*
L6-022 614062 912752 3 133 57.10 0.65 4.30*
61.60 0.55 4.20*
LM series
LM-002 614384 912722 0 319 66.00 1.40 10.33*
107.35 0.60 3.98*
182.00 2.00 3.21*
212.10 1.40 30.94*
219.45 0.75 13.47*
223.00 1.25 3.06*
228.10 0.55 13.20*
LM-004 614385 912724 0 323 106.75 0.80 5.73*
110.35 0.55 13.93*
LM-005 614387 912724 0 342 92.60 0.50 6.20*
146.50 0.60 24.00*
LM-006 614388 912722 0 354 102.80 1.55 4.48*
LM-007 614389 912723 0 10 181.25 0.50 4.70*
L6-016 614050 912836 3 148 22.25 2.95 3.22*
30.70 0.90 20.13*
Notes:
(i) Intersection widths are downhole drill widths not true
widths;
(ii) Assays denoted by (*) are by Philsaga Mining Corporation's
laboratory, all other assays are by Intertek McPhar Mineral
Services in Manila;
(iii) Grid co-ordinates based on the Philippine Reference System
92.
Co-O Drill Hole Sampling and Assaying Procedures
Samples are taken from mainly HQ sized (hole outside diameter 96
mm, hole inside diameter 63.5mm) and some NQ sized (hole outside
diameter 75.8 mm, hole inside diameter 47.6 mm) drill core. The
selected sample intervals are halved by diamond saw and half the
core is bagged, numbered and sent to the Company laboratory. In a
small number of cases to confirm the geological logging, the
selected interval was re-split and [1/4] core re-submitted for
assay.
Initial sample preparation and assaying is undertaken at the
Company's on-site laboratory. Samples are dried at 105 C for 10 to
16 hours, crushed to less than 1.25 cm by jaw crusher, re-crushed
to less than 50 mm using a secondary crusher followed by ring
grinding of 1kilogram of sample to nominal particle size of less
than 200 mesh. Barren rock wash is used after every five samples in
the preparation equipment. The samples are assayed by fire assay
with Atomic Absorption Spectrometer (AAS) finish on a 30 gram
sample. All assays over 5 g/t gold are re-assayed using gravimetric
fire assay techniques on a 30 gram sample. Duplicate samples are
inserted every 10 samples and standard samples are included in
every sample batch.
Check assaying of approximately 50% of samples used in the
yearly resource estimates is undertaken by Intertek McPhar Mineral
Services ("Intertek"), a NATA and ISO 9001/2000 accredited
laboratory in Manila. The pulps are airfreighted to intertek who
fire assay 30 grams of samples using AAS finish and a selected
number of samples are checked using gravimetric fire assay
techniques. Duplicate samples and standards are included in each
batch of check samples. When reporting results, where available,
the assays of Intertek as an independent laboratory have been given
priority over the Company laboratory's results.
Health and Safety
Lost time accident frequency rate (LTAFR) for the nine months to
31 March 2012 is 1.19 including exploration. By comparison, the
latest West Australian gold mining industry figure available to 30
September 2011 was 3.10, excluding exploration statistics of
6.70.
There were no breaches of any of the project's operating
regulations during the quarter.
TAMBIS REGION
The Tambis project comprising the Bananghilig Gold Deposit (Fig.
2) is operated under a Mining Agreement with Philex Gold
Philippines Inc. over Mineral Production Sharing Agreement ("MPSA")
344-2010-XIII which covers 6,262 hectares.
BANANGHILIG GOLD DEPOSIT
In July 2010, new regional and detailed mapping and drilling
programmes were commenced with the aim of validating the current
resource of 650,000 ounces of gold and extending it to provide a
reserve of approximately 1,000,000 ounces. This reserve would form
the basis for a feasibility study which would target production of
200,000 ounces of gold per year from a new milling facility.
The announcement of 12 September 2011 summarises the Tambis
regional geological setting, local geological setting, deposit
description and mineralisation, shows a typical cross-section
through the deposit and the drill hole intersections obtained for
the period 24 July 2010 to 31 August 2011. Additional information
is contained in the September 2011 quarterly report dated 24
October 2011 and in a drilling update on 17 January 2012.
Current drilling is focussed on infill to upgrade the resources
to the Indicated category. The infill programme totals
approximately 18,200 metres and is expected to be completed in late
August 2012. A new Inferred resource estimate is planned for the
September quarter 2012.
A further update of drilling results is planned during the
September quarter.
USA PORPHYRY COPPER-GOLD PROSPECT
A Memorandum of Agreement with Corplex Resources Inc. covers the
Usa prospect which is located within MPSA application XIII-00077.
Processing of the tenement application is progressing.
LINGIG
The Lingig prospect is located in Mineral Production Sharing
Agreement 343-2010-XIII with an area of 3,824 hectares over which
the Company has an operating agreement.
Grid line preparation for an IP/Res and ground magnetics
programme is underway.
ANOLING
The Mines Operating Agreement with Alcorn Gold Resources Inc.
covers MPSA application 039-XIII situated approximately 8
kilometres by road to the north of the millsite as shown on Figure
2 (please see link at the end of this announcement). Approval of
the MPSA is awaited pending completion of the mining industry
policy review.
Four drill rigs are currently operating. Mapping, trenching and
sampling are on-going.
SAUGON PROJECT
First Hit Vein
Background
Figure 2 (please see link at the end of this announcement) shows
the Saugon Project located approximately 28 kilometres by road from
the Co-O Mill. Work in 2004 involved drilling at the First Hit Vein
(holes SDDH-001 to SDDH-035) in conjunction with underground
development via a 30 metre deep inclined winze down the
vein-breccia to assist in understanding the mineralisation.
Further details are contained in the announcements dated 20
April 2010 which summarised the historical results and 1 December
2010 which contained drilling results for holes SDDH-36 to
SDDH-64A.
Exploration and Drilling
Drilling was terminated in the December 2011 quarter. Regional
mapping is continuing and the IP/Res and ground magnetics programme
has been completed.
Drilling continued at the First Hit Vein seeking extensions of
the mineralisation previously reported and testing a number of
other mapped structures with holes SDDH 65 to 104 in 37 holes for
10,790.20 metres. Holes SDDH 65 to 98 were drilled around the First
Hit Vein, and SDDH 99 to 104 were drilled to test other regional
targets.
Drilling at the First Hit Vein did not significantly extend
mineralisation, however the strike length of the mineralisation
possibly narrows down at depth and could continue below the
drilling as shown on Figure 5 (please see link at the end of this
announcement).
Table IV summarises the results >1 g/t gold over >0.2
metres downhole.
** 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. Refer to Stock
Exchange announcement dated 24 August 2011.
First Hit Vein drill hole results >1 g/t gold and >0.2
metres downhole and Cu, Pb and Zn >=0.01%
Hole East North Dip Azimuth From Width Assays
number ([deg]) ([deg]) (metres) (metres)
Au Ag Cu Pb Zn
(g/t) (g/t) (%) (%) (%)
SDDH-070 616764 899268 -50 310 29.00 2.00 1.83 15.20 0.03 - -
SDDH-076A 616651 899158 -50 310 93.55 0.30 2.47 30.90 0.05 0.58 0.70
SDDH-084 616613 899085 -60 310 60.30 0.70 1.17 1.00 - - 0.03
SDDH-086 617156 899414 -50 310 91.15 1.35 11.32 75.60 0.02 0.05 0.07
SDDH-094 617002 899228 -60 310 185.60 1.05 2.02 21.60 0.31 0.22 0.67
SDDH-095 617115 899245 -56 310 230.20 0.25 1.87 - 0.39 0.89 0.36
SDDH-096 617002 899123 -61 310 274.15 1.50 4.61 - 0.17 0.54 0.40
Notes:
(i) Intersection widths are downhole drill widths not true
widths;
(ii) All assays are by Intertek McPhar Mineral Services
laboratory in Manila except for holes SDDH-095 and SDDH-096 which
are by the Philsaga laboratory; and
(iii) Grid coordinates based on the Philippine Reference System
92
FINANCIALS (unaudited)
As at 31 March 2012, the Company which is debt free, had total
cash, cash equivalent in gold on metal account and bullion of
approximately US$71.3 million (31 Dec 2011: US$80.2 million).
During the quarter,
- the Company sold 10,000 ounces of gold at an average price of
US$1,738 per ounce (YTD: sold 35,446 ounces of gold at an average
price of US$1,679 per ounce);
- incurred exploration expenditure of US$8.2 million (YTD: US$23.5 million);
- spent US$7.6 million on capital works, associated sustaining
capital at the mine and mill and also costs for the new mill
construction and infrastructure (YTD: US$16.6 million); and
- spent US$9.0 million on general and accelerated mine
development, inclusive of shaft sinking costs (YTD: US$23.6
million).
CORPORATE
An interim unfranked dividend of A$0.05 per share was paid to
shareholders on 23 March 2012. There was no foreign conduit income
attributed to the dividend, and the total amount paid, inclusive of
associated costs was US$10.2 million.
For further information please contact:
Australia
Medusa Mining Limited
Geoffrey Davis, Chairman
Peter Hepburn-Brown, Managing
Director +61 8 9367 0601
United Kingdom
Fairfax I.S. PLC
Financial Adviser and Broker
Ewan Leggat/Laura Littley +44 (0)20 7598 5368
Information in this report relating to Exploration Results has
been reviewed and is based on information compiled by Mr Geoff
Davis, who is a member of The Australian Institute of
Geoscientists. Mr Davis is the Chairman 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 "Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves" and is a "Qualified Person" as defined in "National
Instrument 43-101" of the Canadian Securities Administrators. Mr
Davis consents to the inclusion in the report of the matters based
on his information in the form and context in which it appears.
Information in this report relating to Mineral Resources has
been estimated and compiled by Mark Zammit of Cube Consulting Pty
Ltd of Perth, Western Australia. Mr Zammit is a member of The
Australasian Institute of Mining & Metallurgy and has
sufficient experience that is relevant to the style of
mineralisation and type of deposit under consideration and to the
activity which he is undertaking to qualify as a Competent Person
as defined in the 2004 Edition of the "Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves" and is a "Qualified Person" as defined in "National
Instrument 43-101" of the Canadian Securities Administrators. Mr
Zammit consents to the inclusion in the report of the matters based
on his information in the form and context in which it appears.
Information in this report relating to Ore Reserves is based on
information compiled by Dr Spero Carras of Carras Mining Pty Ltd.
Dr Carras is a Fellow of the Australasian Institute of Mining &
Metallurgy and has 30 years of experience which is relevant to the
style of mineralisation and type of deposit under consideration and
to the activity which he is undertaking to qualify as Competent
Person as defined in the 2004 Edition of the "Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves" and is a "Qualified Person" as defined in "National
Instrument 43-101" of the Canadian Securities Administrators. Dr
Carras consents to the inclusion in the report of the matters based
on his information in the form and context in which it appears.
DISCLAIMER
This announcement may contain certain forward-looking
statements. The words 'anticipate', 'believe', 'expect', 'project',
'forecast', 'estimate', 'likely', 'intend', 'should', 'could',
'may', 'target', 'plan' and other similar expressions are intended
to identify forward-looking statements. Indications of, and
guidance on, future earnings and financial position and performance
are also forward-looking statements.
Such forward-looking statements are not guarantees of future
performance and involve known and unknown risks, uncertainties and
other factors, many of which are beyond the control of Medusa, and
its officers, employees, agents and associates, that may cause
actual results to differ materially from those expressed or implied
in such statements.
Actual results, performance or outcomes may differ materially
from any projections and forward-looking statements and the
assumptions on which those assumptions are based.
You should not place undue reliance on forward-looking
statements and neither Medusa nor any of its directors, employees,
servants or agents assume any obligation to update such
information.
To view Figures and Preliminary Development Timetable, please
click on or paste the following link in your browser:
http://www.rns-pdf.londonstockexchange.com/rns/8430B_-2012-4-23.pdf
This information is provided by RNS
The company news service from the London Stock Exchange
END
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