TIDMMML
RNS Number : 8924B
Medusa Mining Limited
09 April 2013
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
09 April 2013
BANANGHILIG GOLD DEPOSIT SCOPING STUDY
(ASX & LSE: MML)
Medusa Mining Limited ("Medusa" or the "Company"), through its
Philippines operating company Philsaga Mining Corporation advises
that the positive results of its first pass Bananghilig Gold
Deposit Scoping Study(1) to +/- 25% accuracy warrant the
commencement of a Feasibility Study to be undertaken by external
consultants. It is planned to complete the Feasibility Study in the
September quarter 2013 which will include financial outcomes.
Key Scoping Study Parameters
-- Mill size: 5,000,000 tonnes per annum to produce 200,000 annualised ounces
-- Initial recovery by CIL at 80% with potential through a plant
upgrade to increase to 90% with flotation plus oxidation processing
routes.
-- CAPEX +/-25%: US$220 million comprising:
-- Mill: US$170 million
-- Associated infrastructure including tailings storage: US$50 million
-- Mill OPEX: US$12 per tonne
-- Indicative diluted head grade: 1.3 g/t gold
-- Indicative mining OPEX: US$15.50 per tonne ore
-- Indicative waste to ore strip ratio: 5:1
-- Indicative cash costs: US$565 per ounce (including royalties)
Additional information
-- Resource update and initial reserve estimations following
incorporation of 14 infill drill holes with results published in
September quarter 2013
-- A second mill site being prepared for sterilisation drilling
following the discovery of strong mineralisation at the first
site
-- Strong community support indicated through comprehensive community consultation
-- Application for Environmental Clearance Certificate in preparation
-- Feasibility Study to +/-15% accuracy by external consultants
commenced for completion in the September quarter 2013.
A number of opportunities exist to improve the project economics
and extend the mine life through a range of initiatives including
resource expansion, mine scheduling, grade optimisation,
processing, flow-sheet optimisation and other initiatives to be
undertaken in the Feasibility Study. Currently there are no
perceived environmental or social impediments for the development
of the project.
([1]) The Bananghilig Gold Deposit Scoping Study is preliminary
in nature, and it includes inferred mineral resources that are
considered too speculative geologically to have the economic
considerations applied to them that would enable them to be
categorized as mineral reserves, and there is no certainty that the
Scoping Study will be realised.
Peter Hepburn-Brown, Managing Director of Medusa, commented:
"We are very pleased with the progress of the Bananghilig
Project and the positive outcome of the Scoping Study, such that
work has already commenced on additional studies to progress the
Feasibility Study. We are optimistic that the Feasibility Study
will enhance the project economics which we are aiming to complete
in the September quarter. We are also very optimistic, especially
based on the sterilisation drilling results announced last week,
that there is a real opportunity to extend the mine life
significantly."
Background
Arccon (WA) Pty Ltd was requested to undertake Scoping Studies
to +/- 25% accuracy on the Bananghilig Gold Deposit to ascertain
whether to proceed to Feasibility Studies to +/- 15% accuracy.
The work has involved supervising comprehensive metallurgical
test work programmes, developing process flow sheets and
preliminary equipment selection, estimating equipment CAPEX costs,
as well as CAPEX for tailings storage facilities and associated
infrastructure. Mining will be contracted out.
The Bananghilig Deposit currently comprises an Indicated
Resource of 11,900,000 tonnes at 1.59 g/t gold for 608,000 ounces
and an Inferred Resource of 9,000,000 tonnes at 1.62 g/t gold for
472,000 ounces using a cut-off of 0.8 g/t gold.
Fourteen additional infill drill holes are nearing completion
which will be incorporated into the data base and used to estimate
a revised resource and the initial reserve which will be published
during the September quarter 2013.
Discussion
Geology and Mineralisation
The Bananghilig Deposit currently consists of three zones, each
approximately 1 kilometre long and open in all directions, locally
termed the Sorex, Garden and Malinao zones. These zones are broadly
defined on the basis of the projection in plan of >= 0.5 g/t
gold drill hole intersections.
The mineralisation is located mainly within the Bananghilig
diatreme breccia which measures at least 1,000 metres west to east
and is still open to the south and east beneath the younger
limestone sediments. Additional mineralisation is hosted around the
diatreme margins and in the country rocks along structural
corridors.
The diatreme breccias contain unsorted fragments of the
andesitic basement as well as fragments of the later intrusive
rocks predating the diatreme events in a matrix of comminuted rock
flour and magmatic crystals. Fragment sizes range from
granule-sized to building-sized mega-blocks which have been torn
off the walls of the diatreme during the multi-episodal explosive
activity. The explosive activity also fractured the mega-blocks and
wall rocks, preparing them for subsequent mineralisation
deposition.
Additional detailed geological information of the deposit is
contained in the announcement of 12 September 2011.
The geology and alteration characteristics of the deposit have
been modelled into 10 domains. As a result of the metallurgical
work, combined with the domain characterisations, approximately
13.4% by volume of the ore has been identified to contain silicic
alteration with subsequent reduced metallurgical recoveries of
between 63% to 68%. This ore will be stockpiled for later
treatment.
Additional laboratory mineralogical studies are in progress to
enhance the understanding of the ore characteristics with respect
to the sulphide minerals.
Operating Parameters
Table I below summarises the current planned operating
parameters.
Table I
Site Characteristics Units Value
----------------------------- ---------- ----------------------------
Throughput - Dry Tonnes mtpa 5,000,000
----------------------------- ---------- ----------------------------
Gold Production - name
plate Oz/a 200,000
----------------------------- ---------- ----------------------------
Gold Grade g/t 1.63
----------------------------- ---------- ----------------------------
Overall Gold Recovery % 80
----------------------------- ---------- ----------------------------
Bond Ball Mill Work kwh/t 16.0 (85(th) percentile)
Index
----------------------------- ---------- ----------------------------
Crushing Work Index kwh/t 14.2 (85(th) percentile)
----------------------------- ---------- ----------------------------
Availability % 91.3
----------------------------- ---------- ----------------------------
Solids Feed Rate t/h 625
----------------------------- ---------- ----------------------------
SAG Mill Installed Power MW 4.3
----------------------------- ---------- ----------------------------
Ball Mill Installed
Power MW 9.4
----------------------------- ---------- ----------------------------
Cyanide - leach kg/t 0.95
----------------------------- ---------- ----------------------------
Lime - hydrated kg/t 0.87
----------------------------- ---------- ----------------------------
Hydrochloric Acid kg/t 0.12
----------------------------- ---------- ----------------------------
SMBS kg/t 0.84
----------------------------- ---------- ----------------------------
Copper Sulphate kg/t 0.04
----------------------------- ---------- ----------------------------
Notes:
The major reagents are lime, cyanide, diesel, hydrochloric acid,
sodium metabisulphide (SMBS) and copper sulphate
The cyanide detoxification circuit utilise SMBS and copper
sulphate
Metallurgical testwork
The flow sheet for the proposed Bananghilig Mill is shown in
Figure 1 (please see the link at the end of this announcement).
The test work campaign indicated:
-- the ore is soft to medium hardness and conducive to
conventional primary crush and SAG and ball milling;
-- the ore is not abrasive;
-- optimum CIL leach conditions of:
- 75 micron grind size,
- 0.10% cyanide levels,
- 24 hour leach times,
-- a conventional INCO detoxification process is suitable;
-- the ore consists of approximately 40% kaolinite, 40% alpha
quartz, 5% muscovite and/or illite, and 4% sulphides (primarily
pyrite); and
-- excluding the silicic ore, CIL recoveries of 80% are readily
achievable and which can be improved to 90% with the use of
flotation plus oxidation processes.
Mining
The estimated mining costs assume:
-- the ore is predominantly free dig as observed from geological
and geotechnical logging, and verified by the work indices;
-- the mining will be undertaken by contractors using 100 tonne
trucks and 125 tonne excavators/shovels; and
-- the mining benches will be 10 metres.
Power
Discussions with the local power provider to obtain power from
the Mindanao grid are planned.
Land access, local relocations and infrastructure
Planning in conjunction with local authorities and residents is
well advanced regarding land access, re-location of some local
residents and the provision of new housing and services including
schools, hospitals, power and domestic water supplies.
Scoping Study exclusions
The Scoping Study excludes:
-- project execution/implementation plans;
-- project milestone schedules; and
-- risk analysis
Scoping Study Recommendations
The Scoping Study key recommendations for the Feasibility Study
are:
-- identify project risks and impacts, and develop risk mitigation plan;
-- develop project execution/implementation plan;
-- develop key project milestone schedule project life cycle,
such as additional study phase(s), engineering and design,
construction and operations phases;
-- translate project scoping study concepts into preliminary
engineering & design documentation;
-- conduct design review for constructability, safety, maintainability, and operability;
-- optimise and undertake further engineering study to provide
costs validation and improved level of accuracy;
-- geotechnical drilling of the site, including diamond core drilling;
-- complete in-progress base-line studies;
-- complete further environmental geochemical testing to meet
permitting requirements (characterisation of mineralised rocks,
waste rocks & tailings geochemistry); and
-- develop a mine plan using pit optimisation software
programmes such as Whittle 4D and include silver as a by-product.
The mine plan will generate a mining schedule with varying ore
types and gold grades which will be used to generate a plant
production profile leading to detailed plant design. Once the mine
plan is developed the suitability and representativity of the
initial selection of testwork samples will be reviewed.
Figure 1, Bananghilig Mill process schematic can be viewed by
cutting and pasting the following link into your browser:
http://www.rns-pdf.londonstockexchange.com/rns/8924B_-2013-4-9.pdf
For further information please contact:
Australia
+61 8 9367
Medusa Mining Limited 0601
Peter Hepburn-Brown, Managing
Director
United Kingdom
SP Angel Corporate Finance
LLP +44 (0)20
(Financial Adviser & Broker) 3463 2260
Ewan Leggat/Laura Littley
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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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