New Porphyry Copper-Gold Target
May 05 2010 - 2:02AM
UK Regulatory
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
05 May 2010
NEW PORPHYRY COPPER-GOLD TARGET
Medusa Mining Limited (ASX and AIM - MML; TSX - MLL) ("Medusa" or the
"Company"), through its Philippines operating company Philsaga Mining
Corporation ("Philsaga"), advises that it has discovered a new outcropping
porphyry copper-gold target named Usa.
The target has so far been defined by reconnaissance outcrop sampling over an
area of approximately 500 metres by 500 metres with possible extensions. Rock
chip values range up to 0.59% copper and 0.42 g/t gold.
Geoff Davis, Managing Director of Medusa, commented:
"The discovery of new mineralised outcropping copper-gold porphyry at Usa
highlights the unquestioned prospectivity of our large tenement area. This
discovery brings the total of copper targets to seven.
The Company has no doubt that on-going exploration will uncover other targets,
and with our aggressive drilling programmes, we will continue to add
considerable value to our asset base".
Background
The Usa prospect is predominantly contained within Mineral Production Sharing
Agreement application ("APSA") XIII-00077. The Company has a Memorandum of
Agreement with Corplex Resources Inc. ("Corplex") whereby:
* Corplex will receive a 4% gross royalty on all production, or
* in the event of a major discovery and completion of a scoping study which
demonstrates at least a five year mine life, Corplex can elect to:
a. buy back a 30% interest by re-imbursing to the Company a sum equal to four
times the expenditure on the tenement; and
b. contribute to 30% of all on-going expenditure from the point of buy-back
forwards.
Or,
c. should Corplex elect not to contribute to all on-going expenditure, then
Corplex can elect once only to dilute to a 15% non-contributing free carried
interest to commencement of production, at which point the Company shall
provide a loan to Corplex to fund its 15% interest; or
d. in the event that Corplex does not exercise the buy-back, then Corplex will
maintain its 4% gross royalty on production.
There are indications that the prospect extends eastwards into APSA XIII-00098
which is owned by Mindanao Philcord Mining Corporation which will receive a 1%
net profits interest from any production.
Regional Setting
Figure 1 (please see link at the end of this announcement) shows the Usa
prospect location and regional geology, Figure 2 (please see link at the end of
this announcement) shows the detailed geology and geochemistry contours and
Figure 3 (please see link at the end of this announcement) shows an aeromagnetic
image overlain by the geochemistry contours.
The Usa prospect is located adjacent to the west side of the Barobo Fault
corridor. This fault is parallel to the Philippine Rift Fault located
approximately 30 kilometres to the west of the Usa prospect. The Barobo Fault
corridor has numerous gold prospects already located along or adjacent to it,
including Guinhalinan, Umbon, Matanog, Alikway and Usa.
The Company interprets the Barobo Fault corridor as being prospective for
intrusive and structurally controlled styles of copper and gold mineralisation.
Old grey limestone and calcareous sediments are intruded by multiple phases of
dacite, diorite and andesite porphyry.
Styles of mineralisation exposed along the corridor include pyrite and base
metal sulphide bearing hydrothermal and tectonic breccias; skarn related
magnetite, pyrite, base metal sulphide and gold bearing veins; pyrite, base
metal sulphide gold bearing quartz-carbonate veins and vein breccias; and
disseminated, fracture controlled pyrite and base metal sulphide in intrusive
bodies and surrounding host rocks. Skarn related magnetite, pyrite, copper and
gold mineralisation are also noted.
Local Geology and Mineralisation
The geology consists of a mineralised and altered diorite complex which is
intruding andesitic volcanics, older limestone and calcareous sediments. The
setting and style of mineralisation are very similar to that at the Kamarangan
copper-molybdenum porphyry prospect to the north where chalcopyrite and
magnetite bearing diorite was intersected over several hundred metres in two
holes during a scout diamond drilling completed in late 2008 to early 2009 (see
announcement dated 29 May 2009).
The fine- to medium-grained diorite is variably but strongly phyllic altered
(white clay, sericite and pyrite) with variably dispersed hairline veinlets of
fine-grained magnetite. Chlorite alteration is rare proximal to the diorite, but
increases to moderate intensity in volcanic units distal to the diorite. North
east trending fractures and veinlets within and on the edges of the diorite are
often lined with fine-grained pyrite and magnetite. The diorite has variably
distributed weak pervasive grey silica alteration, and is locally stockwork
veined with fine 2 to 3 mm thick clear and grey quartz veins; the veins often
have fine-grained pyrite, magnetite and occasional bornite disseminated along
the selvages.
Mineralisation is predominantly pyrite occurring as fracture filling grains
disseminated grains and vein infill. The pyrite is accompanied with bornite, and
with occasional chalcopyrite. Malachite stained limestone and calcareous
sediments with sphalerite, pyrite and bornite veins, and weakly mineralised
pyrite and chalcopyrite magnetite have been noted in drainage float samples to
the north of the diorite.
Contouring of the rock chip copper results (>700 ppm Cu) and gold results (>0.1
g/t Au) are shown on Figure 2 (please see link at the end of this announcement).
The gold and copper contours are in close spatial proximity. The anomalous
copper and gold values also overlie three magnetic high features, visible in the
1st vertical derivative of airborne magnetic data shown on Figure 3 (please see
link at the end of this announcement). The magnetic features appear to reflect
zones of strong magnetite alteration in the diorite.
The relationship of the diorite body to the surrounding rocks suggests that it
has been recently uncovered and is not deeply eroded.
Artisanal mining activity with small but consistent recoveries is common in the
drainages overlying and downstream of the mineralised altered diorite. Less
active artisanal mining activity is noted to the north where chlorite and clay
altered, sulphide veined andesitic units occur.
A large grid based soil sampling program designed to delineate the extent of the
gold and copper mineralisation is expected to commence in May 2010.
ASSAYING PROCEDURES
Rock chip samples were prepared and assayed for base metal content at the
Philsaga Laboratory using internal laboratory procedure "Al Block". The scheme
allows for copper, lead and zinc determinations via a three acid digest with
conventional Atomic Absorption Spectrometry ("AAS") finish. The scheme is graded
at geochemical grade detection levels only (not ore grade). Gold content
determinations were via internal laboratory procedure "FA-30". The procedure
uses a conventional 30 gram sample charge fire assay with AAS finish;
gravimetric finish is conducted on high grade results.
Rock chip sample pulps were submitted to McPhar Geoservices Inc. in Manila for
check assaying. The samples were submitted with the appropriate number of
blanks, duplicates and Certified Reference Materials. The pulps were assayed for
copper, lead and zinc determinations by laboratory scheme AA1. The procedure
uses a three acid digest with conventional AAS finish. The procedure is graded
at ore grade detection levels. Gold content determinations were by conventional
30 gram fire assay with AAS/GTA finish (McPhar procedure PM5).
A review of the quality assurance and quality control measures from the original
samples, and subsequent check samples, produced results that can be considered
acceptable and within industry standard.
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 and Broker
Ewan Leggat/Laura Littley
Lothbury Financial Services Limited +44 (0)20 7868 2567
Michael Padley/Libby Moss
Canada
Nicholas Sayce, Investor Relations +1 416 822 4404
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 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.
Refer to the Technical Report which was filed on www.sedar.com
<http://www.sedar.com/> in March 2010 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.
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 has completed the expansion of 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 a
production level 100,000 annualised ounces, and is currently conducting near
mine exploration to assess the possibilities of further expansion to 200,000
ounces per annum. Current cash costs at the Co-O Mine are approximately US$190
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 for the discovery of substantial copper deposits
within the tenement holding of more than 800 km2.
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.
[HUG#1411794]
Acompanying Images: http://hugin.info/138050/R/1411794/364109.pdf
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