TIDMMML
RNS Number : 5295D
Medusa Mining Limited
30 April 2013
Medusa Mining Limited
("Medusa" or the "Company")
30 April 2013
QUARTERLY ACTIVITIES REPORT
PERIOD ENDED 31 MARCH 2013
-- Snapshot of Medusa:
-- Un-hedged, low cost, gold producer focused on organic growth in the Philippines
-- Growth path to annualised production of 400,000 ozs per year
by early 2016 (subject to new legislation on mining taxes and
royalties to be passed by Congress)
-- Growth underpinned by strong cashflow from Co-O Mine (narrow vein underground)
o FY 2012/13: revised production guidance of 70-80,000 ozs at
cash costs circa US$290/oz
-- Current Mineral Resources:
o Co-O Mine:
-- Indicated 715k ozs at 11.8 g/t gold,
-- Inferred1,304k ozs at 9.4 g/t gold
o Bananghilig:
-- Indicated 608k ozs at 1.59 g/t gold, Inferred 472k ozs at 1.62 g/t gold
-- Current Probable Reserves:
-- Co-O Mine: 568k ozs @ 9.7 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
-- Bananghilig Scoping Study ** positive, Feasibility Study underway
-- Bananghilig Resource base growing
-- Excellent gold and copper exploration upside in 820 km(2) of
tenements. Revised Exploration budget for FY 2012/13 of US$25M
Board of Directors:
Geoffrey Davis (Non-executive Chairman)
Peter Hepburn-Brown (Managing Director)
Raul Villanueva (Executive Director)
Ciceron Angeles (Non-executive Director)
Robert Weinberg (Non-executive Director)
Andrew Teo (Non-executive Director)
Gary Powell (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:
EXECUTIVE ORDER ON MINING IN THE PHILIPPINES
-- New legislation on mining taxes and royalties is yet to be
finalised by Congress.
-- DENR Secretary on 7 March 2013 approves lifting of moratorium
on the acceptance and processing of new mining applications by all
Regional Offices of the Mines and Geosciences Bureau.
Co-O MINE PRODUCTION & DEVELOPMENT
-- New Mill: crusher and SAG mill commissioning in June.
-- Production: 14,021 ounces at a recovered grade 6.76 g/t gold
and cash costs of US$296 per ounce.
-- Revised production guidance:now 70-80,000 ozs for FY2013 due
to on-going un-planned old mill maintenance and upgrading for the
new mill tie-in.
-- Saga Shaft: operating, 200 metres of driving completed. One
Alimak ore pass commenced from Level 8 to Level 6.
Co-O MINE EXPLORATION
-- Drilling has been reduced to two surface and two underground
rigs.
TAMBIS AREA - BANANGHILIG GOLD DEPOSIT
-- Scoping Study ** at +/- 25% accuracy returns positive result
indicating cash costs of US$565/oz gold. Feasibility Study
completion in Sept Qtr 2013.
-- Additional 14 infill holes completed to increase the
Indicated Resources category.
-- Sterilisation drilling results include 12.40 metres at 7.69
g/t gold, 12.70 metres at 7.00 g/t gold, 31.60 metres at 7.33 g/t
gold, 43.70 metres at 2.48 g/t gold and 12 metres at 5.47 g/t
gold.
-- Two rigs to re-commence sterilisation drilling to delineate
areas for plant site, tailings and waste storage facilities.
CORPORATE & FINANCIALS (unaudited)
-- Total cash, cash equivalent in gold on metal account and
bullion at site at end of quarter of approximately US$8.91
million.
* 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.
** The Scoping Study referred to in this report is based on
low-level technical and economic assessments of Indicated and
Inferred Mineral Resources, and is insufficient to support
estimation of Ore Reserves or to provide assurance of an economic
development case at this stage, or to provide certainty that the
conclusions of the Scoping Study will be realised.
PROJECT OVERVIEW
Please see link at the end of this announcement to view Figures
1 & 2 which show the locations of the Company's projects.
EXECUTIVE ORDER ON MINING IN THE PHILIPPINES
On 06 July 2012, Philippine President Benigno Aquino III signed
Executive Order No. 79 entitled "Institutionalizing and
Implementing Reforms in the Philippine Mining Sector Providing
Policies and Guidelines to Ensure Environmental Protection and
Responsible Mining in the Utilization of Mineral Resources" ("EO
79").
On 10 September 2012, the Department of Environment and Natural
Resources ("DENR") issued Administrative Order No. 2012-07 ("Rules
and Regulations to Implement EO-79" or "EO-79 IRR"), and on 08
October 2012, issued Administrative Order No. 2012-07-A2 ("EO-79
Amended IRR") to revise Sections 3, 7 and 9 of EO-79 IRR. EO-79 IRR
and its amendments took effect on October 25, 2012.
The implications of the EO-79 with regards to the Company's
projects are discussed in the June 2012 and September 2012
quarterly reports to the ASX. There has been no change in the
Company's view since then.
The new legislation on mining taxes and royalties is yet to be
finalised by Congress.
On March 07, 2013, the Secretary of the Department of
Environment and Natural Resources (DENR) approved the lifting of
the moratorium on acceptance of applications for Exploration
Permits and Financial and Technical Assistance Agreements.
MINERAL RESOURCES and ORE RESERVES
The Company's current resources (including the Saugon resource)
and ore reserves are shown in Table I:
Table I. Mineral Resources and Ore Reserves
Deposit Category Tonnes Grade Ounces
g/t gold gold
-------------------------- ------------- -------------------- ---------- ----------
RESOURCES
-------------------------- ------------- -------------------- ---------- ----------
Co-O Resources Indicated 1,890,000 11.8 715,000
-------------------------- ------------- -------------------- ---------- ----------
Inferred 4,325,000 9.4 1,304,000
---------------------------------------- -------------------- ---------- ----------
Indicated &
Total Co-O Resources Inferred 6,215,000 10.1 2,019,000
-------------------------- ------------- -------------------- ---------- ----------
Bananghilig Resources Indicated 11,900,000 1.59 608,000
-------------------------- ------------- -------------------- ---------- ----------
Inferred 9,000,000 1.62 472,000
---------------------------------------- -------------------- ---------- ----------
Total Bananghilig Indicated &
Resources Inferred 20,900,000 1.60 1,080,000
-------------------------- ------------- -------------------- ---------- ----------
Saugon Resources Indicated 47,500 6.99 10,700
-------------------------- ------------- -------------------- ---------- ----------
Inferred 34,000 4.55 5,000
---------------------------------------- -------------------- ---------- ----------
Indicated &
Total Saugon Resources Inferred 81,500 5.97 15,700
-------------------------- ------------- -------------------- ---------- ----------
Indicated &
TOTAL RESOURCES Inferred 27,196,500 3.56 3,114,700
-------------------------- ------------- -------------------- ---------- ----------
Total Indicated
Resources 13,837,500 3.00 1,333,000
----------------------------------------- -------------------- ---------- ----------
Total Inferred Resources 13,359,000 4.15 1,781,000
----------------------------------------- -------------------- ---------- ----------
RESERVES
-------------------------- ------------- -------------------- ---------- ----------
Co-O Reserves Probable 1,820,000 9.7 568,000
-------------------------- ------------- -------------------- ---------- ----------
Note: Resources include reserves
Co-O MINE
Gold Production
The production statistics for the March 2013 quarter with
comparatives for the previous three quarters are summarised in
Table II below.
Table II. Gold production statistics
Unit Qtr ended Qtr ended Qtr ended Qtr ended Year
31 Mar 31 Dec 30 Sep 30 Jun to date
2013 2012 2012 2012 31 Mar
2013
-------------------- -------- ---------- ---------- ---------- ---------- ---------
Tonnes mined WMT 83,134 89,504 70,591 74,969 243,229
-------------------- -------- ---------- ---------- ---------- ---------- ---------
Ore milled DMT 73,273 76,999 66,809 66,976 217,081
-------------------- -------- ---------- ---------- ---------- ---------- ---------
Recovered grade g/t 6.76 8.16 7.50 8.10 7.42
-------------------- -------- ---------- ---------- ---------- ---------- ---------
Recovery % 89% 90% 90% 92% 90%
-------------------- -------- ---------- ---------- ---------- ---------- ---------
Gold produced ozs 14,021 18,177 14,403 15,557 46,601
-------------------- -------- ---------- ---------- ---------- ---------- ---------
Cash costs (1) US$/oz $296 $279 $328 $283 $299
-------------------- -------- ---------- ---------- ---------- ---------- ---------
Gold sold ozs 17,760 18,492 25,000 20,000 61,252
-------------------- -------- ---------- ---------- ---------- ---------- ---------
Average gold price
received US$ $1,630 $1,731 $1,636 $1,624 1,662
-------------------- -------- ---------- ---------- ---------- ---------- ---------
Note:
(1) Net of development costs and includes royalties and local
business taxes
Gold production for the quarter was 14,021 ounces, at an average
recovered grade of 6.76 g/t gold and cash costs of US$296 per
ounce, inclusive of royalties and local business taxes.
The mine continued to operate pre-dominantly in development mode
to prepare for the now imminent production increase and all
development ore mined to date has been treated through the mill.The
lower than average grade this quarter was due to mine development
going through lower grade areas in the mine.
In addition to the heavy emphasis on development, the mine's
production has been hampered by shaft haulage access. The recent
completion of the Saga Shaft with additional haulage capacity of
1,500 tpd will overcome the shaft haulage issues as production
builds from Level 8.
Mill availability for the quarter was reduced by 15 days due to
unplanned mill maintenance and upgrading work on sections of the
old mill to be incorporated into the new milling complex.
Medusa, an un-hedged gold producer, sold 17,760 ounces of gold
at an average price of US$1,630 per ounce during the quarter.
Preliminary Development Timetable
Graph 1 is the Preliminary Development Timetable and Production
Guidance for the new Co-O Phase 3 Mill Expansion and Bananghilig
Project.
Operations
Mine Development
The Saga Shaft is operating and hauling primarily waste and some
development ore. Approximately 200 metres of Level 8 development
has been completed with four veins intersected. The first Alimak
rise from Level 8 to Level 6 is underway and the second is being
set up and both should be operational in August. Ore from these
passes will be fed directly to the ore bins by conveyor. The winze
ore pass is expected to be connected to Level 8 in July.
An Alimak rise has progressed 70 metres to deepen the Baguio
Shaft from Level 3 to Level 5 to provide access to additional ore,
as well as to de-bottle neck shaft haulage in this area. It is also
planned to deepen the Agsao Shaft to Level 8 for haulage and
exhaust ventilation.
The lateral development is increasing to a minimum of 1,000
metres per month. Consequently a high proportion of development ore
will continue to be supplied to the current mill and also
stockpiled.
The development for the quarter was 2,317 metres and at the end
of March 2013 there were 50 development headings on-vein, 20
vertical rises on ore and 15 on waste.
Mill Expansion
The current status of activities is:
-- Construction is on schedule for production in June-July
-- Main sub-station and mill and mine transformer stations completed and electrified
-- Thickener upgrade completed and operating
-- Leach tanks completed and converted to CIL
-- Detoxification plant commissioning in April (Photo 2)
-- SAG mill installation on schedule for commissioning in June (Photo 3)
-- Crusher on schedule for commissioning in June (Photo 4)
-- 42 kilometres of electrical cable installation completion in May
-- Tie in of new crushing circuit to leach circuit: 4 weeks production loss
The tie-in of the new mill to the existing facilities in the
June quarter indicates that the tie-in period will take 4 weeks and
includes on-going additional upgrade work not identified in the
original assessment of the old mill circuits which are to be
incorporated into the new milling complex. This will result in
reduced milling time due to interruptions and has been taken into
account when re-estimating production guidance for the remainder of
FY2013.
Co-O Exploration Drilling
Currently there are two diamond drill rigs operating at surface
and two diamond drill rigs operating underground (Levels 3 and
5).
Table III is a summary of significant assay results, >=3 g/t
gold over >=0.5 metres received for completed holes from the 21
February 2013 announcement which contains further details.
Table III. Co-O surface and underground drill hole results of
>=0.5 metres at >=3 g/t gold.
(Results not previously reported are marked )
Hole East North Depth Dip Azimuth From Width Gold Grade
Number (4) (4) (metres) (o) (o) (metres) (2) (1,3) (uncut)
(metres) (g/t gold)
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
SURFACE EXLORATION DRILL HOLES
----------------------------------------------------------------------------------------------------
EXP219 614840 913421 1066.10 -45 180 593.15 1.20 10.96
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
EXP222 613551 913307 908.10 -50 180 131.30 3.40 19.81
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
149.95 1.00 27.02
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
777.35 1.55 4.00
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
803.65 0.6 19.60
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
805.70 4.40 4.15
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
814.45 1.00 3.41
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
820.35 1.00 3.27
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
EXP224 614202 913180 908.10 -63 180 310.40 1.05 3.15
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
397.00 0.75 9.27
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
457.10 1.00 3.59
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
573.60 1.00 3.44
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
625.70 1.90 6.37
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
802.85 0.80 4.48
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
EXP225 614100 913255 800.10 -51 180 424.40 1.95 9.18
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
746.85 1.65 4.95
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
EXP229 613608 913437 1001.10 -45 180 913.70 1.00 3.41
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
917.50 1.60 3.67
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
EXP230 614107 913296 900.10 -63 180 648.55 1.35 6.60
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
UNDERGROUND EXLORATION DRILL HOLES - LEVEL 2
----------------------------------------------------------------------------------------------------
L2-64W-002 613358 912998 58.20 3 323 13.60 1.75 8.43
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
35.50 0.60 3.61
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
L2-73W-002 613239 912890 110.30 3 309 0.00 1.00 4.24
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
UNDERGROUND EXLORATION DRILL HOLES - LEVEL 5
----------------------------------------------------------------------------------------------------
L5-42E-024 614379 912691 425.40 -43 316 143.95 0.70 3.36
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
159.90 1.95 3.47
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
403.80 1.00 4.67
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
406.25 1.00 5.30
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
L5-42E-025 614381 912691 379.00 -43 329 75.35 0.75 12.56
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
227.30 2.40 6.62
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
L5-42E-026 614381 912692 439.10 -43 346 128.95 1.50 4.46
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
162.45 0.70 4.15
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
215.90 1.15 3.28
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
L5-42E-027 614382 912691 411.80 -43 358 102.80 2.20 9.99
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
105.60 0.70 3.58
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
117.90 4.50 10.72
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
131.35 6.05 15.25
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
204.10 1.70 15.36
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
210.55 0.85 22.17
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
252.55 1.75 13.41
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
L5-42E-028 614383 912691 419.90 -43 19 119.60 2.20 31.63
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
329.50 1.95 17.65
------------ ------- ------- ---------- ----- -------- ---------- ---------- ---------------
Hole Number East North Depth Dip Azimuth From Width Gold Grade
(4) (4) (metres) (o) (o) (metres) (2) (1,3) (uncut)
(metres) (g/t gold)
------------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
UNDERGROUND EXLORATION DRILL HOLES - LEVEL 5
-----------------------------------------------------------------------------------------------------
L5-42E-029 614384 912691 417.90 -43 34 225.90 0.70 3.11
------------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
225.90 0.70 3.11
------------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
271.35 0.55 6.17
------------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
L5-42E-030 614385 912691 426.30 -43 41 159.00 2.00 10.92
------------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
314.85 0.90 4.28
------------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
L5-42E-031 614378 912690 396.40 -53 307 124.85 0.65 44.87
------------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
L5-42E-032 614379 912691 401.30 -53 320 123.15 1.50 77.97
------------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
213.65 0.65 12.27
------------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
Notes:
1. Composited intercepts' 'weighted average grades' calculated
by using the following parameters:
(i) no upper gold grade cut-off applied, and
(ii) lower cut-off grade of 3.0 g/t gold, and
(iii) >= 0.5 metres down hole intercept width at >= 3.0 g/t gold.
2. Intersection widths are downhole drill widths not true
widths;
3. Assays are by Philsaga Mining Corporation's laboratory;
4. Grid coordinates 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 63.5 mm) 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 6 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 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, Safety & Environment
Lost time accident frequency rate (LTIFR) for the nine months to
31 March 2013 is 0.15 including exploration.
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.
The Executive Order on Mining (EO-79) signed on 6 July 2012, by
the President of the Philippines, will have no immediate impact on
the Bananghilig Project as the Company can continue to explore,
conduct feasibility studies and planning.
BANANGHILIG GOLD DEPOSIT
The announcement of 12 September 2011 summarises the Tambis
regional geological setting, local geological setting, deposit
description and mineralisation. Additional information is contained
in the September 2011 quarterly report dated 24 October 2011,
resource estimation update on 29 January 2013, and in drilling
updates on 17 January 2012, 8 August 2012, 21 November 2012 and 02
April 2013.
Indicated & Inferred Mineral Resource Estimation
On 29 January 2013, the Company announced the results of
resource estimation undertaken by Cube Consulting Pty Ltd of Perth,
Western Australia. The Indicated Mineral Resource estimate for the
Bananghilig Deposit, comprises 608,000 ounces of gold at 1.59 g/t
gold in 11,900,000 tonnes and an Inferred Mineral Resource of
472,000 ounces of gold at 1.62 g/t gold in 9,000,000 tonnes using a
cut-off grade of 0.8 g/t gold. The 29 January 2013 announcement
comprises a summary of the parameters utilised in the resource
estimation.
Infill Resource Drilling
A 14 hole infill drilling programme (TDH287 to TDH300) has just
been completed within the Bananghilig resource area for an advance
of 3,361.6 metres, to provide additional data in two areas of the
deposit. Assay results have been received for holes TDH287 to
TDH295, with results pending for holes TDH295 to TDH300.
Outstanding assay results should be received by end of May and an
estimate of the silver content of the deposit will be included in
the annual resource update in the September quarter 2013.
Bananghilig Scoping Study
On 09 April 2013, the Company published the results of a first
pass Scoping Study(1) of the Bananghilig Gold Deposit. The Scoping
Study was conducted to +/- 25% accuracy and the results considered
positive, warranting the commencement of a Feasibility Study to be
undertaken by external consultants. The Feasibility Study is
anticipated to be completed in the September quarter 2013. The
Scoping Study parameters and discussion on other parameters,
including metallurgy, mining and operations is included in the 09
and 11 April announcements. The key components are summarised
below:
v mill size approximately 5,000,000 tonnes per annum for 200,000
annualised ounces;
v CAPEX: US$220M comprising:
-- mill US$170M
-- associated infrastructure including tailings storage US$50M
v mill OPEX US$12 per tonne;
v indicative mining OPEX of US$10.50 per tonne;
v indicative recovered head grade 1.3 g/t gold;
v indicative waste to ore strip ratio of 4:1 (after
pre-strip);
v metallurgical recovery of 80% CIL with the potential to
increase to 90% with flotation plus oxidation processing routes at
a later stage;
v the cost of pre-strip is included in CAPEX costs of US$220
million; and
v indicative cash costs: US$565 per ounce and excludes
royalties.
(1) The Scoping Study referred to in this report is based on
low-level technical and economic assessments of Indicated and
Inferred Mineral Resources, and is insufficient to support
estimation of Ore Reserves or to provide assurance of an economic
development case at this stage, or to provide certainty that the
conclusions of the Scoping Study will be realised.
Sterilisation Drilling - New Discovery
A six hole sterilisation drilling programme was completed for an
advance of 2,214 metres in an area located to the southeast of the
Bananghilig resource, to test potential for gold mineralisation and
suitability for infrastructure requirements for further development
of the deposit. All six holes (TDH279 to TDH286) encountered
significant mineralisation and the potential for significantly
increasing the resource base is highly probable given the number of
gold mineralised zones encountered in each hole.
The tenor of the new discovery gold mineralisation is, to date,
similar to, if not better than, the Bananghilig Deposit, which
contains in excess of one million ounces.
Please see link at the end of this announcement to view Figures
3, 4 and 5.
Figure 3 shows the Bananghilig area geology showing the position
of the new mineralisation discovery, beneath the limestone cover,
relative to the Bananghilig resource.
Figure 3. Tambis Project geology showing location of Bananghilig
resource relative to new mineralisation discovery area & other
prospect areas.
Figure 4 shows the Indicated and Inferred resource block model
projected to surface and the location of newly discovered
mineralisation. Figure 5 shows a cross-section, looking northeast,
through the deposit with the resource zones and the sterilisation
drillholes with the newly discovered mineralisation projected onto
the cross-section.
Figure 4. Plan of the Bananghilig resource block model and the
sterilisation drill hole locations.
Figure 5. Bananghilig resource block model and sterilisation
drill holes projected onto section 10710mN.
Sterilisation Drilling Results
Assay results have all been received for the sterilisation
drilling. The majority of which were reported in the 02 April 2012
announcement. Additional results have since been received and
significant intercepts are included in Table III.
Results from the infill drilling will be reported during the
June quarter.
Table III. Bananghilig surface sterilisation drill hole results
>=1 g/t gold. Results previously not reported are marked .
Hole East North Depth Dip Azimuth From Width Gold Grade
Number (4) (4) (metres) (o) (o) (metres) (2) (1,3) (uncut)
(metres) (g/t gold)
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
STERILISATION DRILL HOLES
-------------------------------------------------------------------------------------------------
TDH279 613838 944891 647.1 130 -60 125.40 6.05 1.03
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
137.85 1.20 5.15
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
143.05 4.00 1.47
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
198.30 7.70 1.15
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
288.55 5.60 2.11
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
325.40 1.70 10.89
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
422.70 12.40 7.69
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
466.10 6.90 1.35
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
554.10 6.00 2.03
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
572.85 1.20 4.22
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
599.70 1.00 5.85
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
617.60 8.00 3.16
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
TDH280 613555 944594 317.6 130 -60 247.40 12.70 7.00
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
251.40 1.30 25.84
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
252.70 0.75 15.27
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
253.45 1.00 23.40
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
264.10 8.85 1.54
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
TDH283 613668 944503 308.6 130 -60 147.90 7.00 1.06
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
229.10 5.00 1.17
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
281.10 2.00 7.19
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
TDH284 613605 945083 309.3 130 -60 129.70 5.00 1.03
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
138.75 31.60 7.33
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
173.45 1.00 9.64
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
178.45 13.05 2.24
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
195.50 43.70 2.48
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
289.50 13.30 2.20
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
TDH285 613727 944982 308.1 130 -60 117.65 6.45 2.11
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
150.80 10.85 1.87
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
175.10 12.00 5.47
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
206.10 2.00 2.80
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
228.60 4.00 2.74
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
260.30 1.30 5.49
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
298.20 6.40 1.18
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
TDH286 613939 944798 323.6 130 -60 273.80 8.10 1.73
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
306.25 5.40 20.64
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
318.70 2.00 3.51
--------- ------- ------- ---------- ----- -------- ---------- ---------- ---------------
Notes:
1. Composited intercepts' 'weighted average grades' calculated
by using the following parameters
(i) no upper gold grade cut-off applied, and
(ii) lower cut-off grade of 0.5 g/t gold, and
(iii) >= 5 metres down hole intercept width at >= 0.5 g/t gold, or
(iv) <= 5 metres down hole intercept width at >= 5 gram per metres, and
(v) maximum of 3 metres of downhole internal dilution at <=0.5 g/t gold.
2. Intersection widths are downhole drill widths not true
widths;
3. Assays are by Intertek McPhar Mineral Services Inc. in
Manila;
4. Grid coordinates based on the Philippine Reference System
92.
DRILL HOLE SAMPLING AND ASSAYING PROCEDURES
Drilling Procedures
Drilling, sampling and analytical methodologies are of
internationally acceptable standards. Drilling and analyses are
carried out by independent contractors, SBF Philippines Drilling
Resources Corp. ("SBF") and Intertek McPhar Mineral Services Inc.
("Intertek") respectively.
Drilling is carried out by SBF using wireline diamond coring
techniques, with the core being predominantly HQ triple-tube (HQ3)
diameter (OD 61 mm). The holes are initially collared using PQ
drillbits (OD 123 mm) to recover PQ3 core (OD 83 mm) until the
drillbit encounters competent ground, then the coring bit is
reduced to HQ3 for the remainder of the drill hole. If difficult
conditions are encountered, then the drill bit is changed to NQ3
(core OD 45 mm) and the hole continued until the planned depth or
bad ground conditions prevent further drilling, whichever occurs
first. Core recovery is generally better than 95% and is considered
to be good.
Drill Core Sampling
Drill core is recovered from the inner tube and handled
carefully to preserve the integrity of the drill core. Structural
measurements are taken including Rock Quality Determinations
("RQD") and Fracture Densities. The core is then placed in plastic
core trays, aligned, photographed and marked up for sampling.
The drill core is then cut in half by diamond core saw and
sampled at one metre intervals or at lithological boundaries. The
samples are placed in individually labelled plastic sample bags, a
sample number ticket included, and then sealed for despatch to
Intertek's Sample Preparation laboratory in Surigao City. The
integrity of the core samples is supervised at all times by the
geologists until despatch to the laboratory where they are
accompanied by company personnel until receipt by Intertek.
One Certified Reference Material ("CRM"), one Blank and if
possible, one Duplicate is included within each successive group of
twenty samples that are submitted to the laboratory. QA/QC
monitoring of the drilling program and the results is on-going.
Analytical Procedure
Sample preparation is undertaken by Intertek at their Surigao
City laboratory, where each sample is registered, dried at 105 C
for 6 to 8 hours and crushed to 95% passing 2 mm by jaw crusher,
before a 1kg split is taken for fine pulverising, using a riffle
splitter or rotary sample divider. Pulverised sample is nominally
pulverised to 95% passing 75<MU>m (200 mesh).
Quality control procedures include a 1 in 15 resplit after
crushing for partial preparation and after pulverising for total
preparation. These resplits are also analysed and included in the
analysis report. Four 250 gram splits are obtained, one for sample
analyses and the remaining three for storage for future
reference.
Pulverised samples are analysed by classical fire assay
techniques on a 50 gram charge with Atomic Absorption Spectrometer
("AAS") finish.
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.
The Induced Polarisation, Resistivity and ground magnetics
surveys have been completed. Data processing and interpretation
have been completed by an independent geophysical consultant. A
final report is awaited prior to defining targets for drilling.
Soil sampling and re-mapping are in progress.
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.
SAUGON DEPOSIT
First Hit Vein
Background
Figure 2 shows the Saugon Deposit 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
and the March 2012 quarterly report contained results for holes
SDDH-065 to SDDH-104.
Exploration
Regional mapping, trenching and sampling are continuing.
Resource Estimate
Cube Consulting Pty Ltd has completed a resource estimate for
the Saugon Deposit. A cut-off of 2 g/t gold was used resulting in
an Indicated Resource of 47,000 tonnes at 6.99 g/t gold containing
10,700 ounces and an Inferred Resource of 34,000 tonnes at 4.55 g/t
gold containing 5,000 ounces.
FINANCIALS (unaudited)
As at 31 March 2013, the Company, which is debt free, had total
cash, cash equivalent in gold on metal account and bullion at site
of approximately US$8.91 million (31 December 2012: US$15.7
million).
During the March 2013 quarter,
-- the Company sold 17,760 ounces of gold at an average price of
US$1,630 per ounce (Dec 2012 qtr: sold 18,492 ounces at an average
price of US$1,731 per ounce);
-- incurred exploration expenditure of US$5.9 million (Dec 2012 qtr: US$6.1 million);
-- spent US$4.5 million on capital works, associated sustaining
capital at the mine and mill and also costs for the new mill
construction and infrastructure (Dec 2012 qtr: US$23.9 million);
and
-- spent US$8.4 million on general and accelerated mine
development, inclusive of shaft sinking costs (Dec 2012 qtr: US$8.4
million).
CORPORATE
No dividends were paid during the March 2013 quarterly
period.
Peter Hepburn-Brown, Managing Director of Medusa, commented:
" The Saga Shaft has facilitated aggressive development on Level
8 where we are driving south from the shaft to intersect 11 veins
which will be progressively developed.
As we announced on 8 April, we are still on schedule to
commission the new milling circuit in June 2013. We have
encountered some previously un-recognised upgrade work required in
some sections of the old mill which will increase the tie-in time,
hence we have reduced the production guidance for fiscal year 2013
to between 70,000 to 80,000 ounces as a consequence of reduced mill
availability. In addition there are unpredictable on-going
maintenance issues with the 24 year old current mill.
The outcome of the Bananghilig Gold Deposit Scoping Study is
very encouraging, especially with the discovery of another area of
mineralisation proximal to the current resources. We are looking
forward to the completion of a Feasibility Study and progressing
the project. "
For further information please contact:
Australia
Medusa Mining Limited
Peter Hepburn-Brown, Managing Director +61 8 9367 0601
United Kingdom
SP Angel Corporate Finance LLP
(Financial Adviser & Broker)
Ewan Leggat/Laura Littley +44 (0)20 3463 2260
JORC COMPLIANCE - CONSENT OF COMPETENT PERSONS
Medusa Mining Limited
Information in this report relating to Exploration Results has
been reviewed and is based on information compiled by Messrs Geoff
Davis and Gary Powell who are members of The Australian Institute
of Geoscientists. Mr Davis is the Non-Executive Chairman of Medusa
Mining Limited and Mr Powell is a Non-Executive Director and both
have sufficient experience which is relevant to the style of
mineralisation and type of deposits under consideration and to the
activity which they are 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". Messrs Davis and Powell consent 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 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". 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.
Carras Mining Pty Ltd
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 a Competent
Person as defined in the 2004 Edition of the "Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves". 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 report contains 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 the figures, graphs and photos, please click on or paste
the following link in your browser:
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This information is provided by RNS
The company news service from the London Stock Exchange
END
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