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
Internet:www.medusamining.com.au
MEDUSA MINING LIMITED
(LSE: MML)
QUARTERLY ACTIVITIES REPORT
PERIOD ENDED 30 SEPTEMBER 2010
Medusa Mining Limited ("Medusa" or the "Company"), through its Philippines
operating company Philsaga Mining Corporation ("Philsaga"), announces its
Quarterly Activities Report for the period ending 30 September 2010.
Highlights for the September 2010 quarter:
* Co-O Mine Quarterly production of 25,004 ounces at an average grade of
15.77 g/t at cash cost of US$187 per ounce
* Commenced the new vertical, 3-compartment Saga Shaft (previously Mid-Royal
Ventilation Shaft) to Level 5 (200 metres below surface)
* Total cash and gold on metal account at end of quarter of approximately
US$69.4 million (unaudited)
* A maiden unfranked dividend of A$0.05 per share declared by the Board, will
be paid to all shareholders on 8 November 2010
* The Company commenced trading of its ordinary shares on the Main Market of
the London Stock Exchange on 28 October 2010
Managing Director Geoff Davis commented:
"I am pleased to report on an operational level a steady level of production in
line with advice to the market of 25,004 ounces for the first quarter of the
financial year. Completion of a thickener at the mill, commencement of a new
water storage tank, site works for two additional leach tanks and commencement
of work for the new three-compartment Saga Shaft attest to the on-going capital
works programme to improve the operational efficiencies and capacity of the
operation.
Subsequent to quarter end, shareholders of the Company at a General Meeting
approved amendments to the Company's Constitution, allowing Directors to declare
an unfranked maiden dividend of A$0.05 per share, which will be paid to all
shareholders on 8 November 2010.
In addition, the Company earlier today achieved its listing and admission to
the Main Market of the London Stock Exchange, successfully graduating from AIM."
28 October 2010
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
Financial Adviser and Broker
Ewan Leggat/Laura Littley
Lothbury Financial Services +44 (0)20 7868 2567
Michael Padley/Libby Moss
Canada
Nicholas Sayce, Investor Relations +1 416 822 4404
QUARTERLY ACTIVITIES REPORT
PERIOD ENDED
30 SEPTEMBER 2010
=-------------------------------------------+-----------------------------------
|
Snapshot of Medusa: |OVERVIEW:
|
* Un-hedged, low cost, dividend paying | Co-O MINE PRODUCTION &
gold producer focused on organic growth |DEVELOPMENT
in the Philippines |
| * Quarterly production of 25,004
| ounces at an average grade of
* 3 to 5 years growth path to production | 15.77 g/t at cash cost of
of 300,000 to 400,000 ozs per year | US$187 per ounce
|
|
* Growth underpinned by strong cashflow | * Commenced the new vertical, 3-
from Co-O Mine (narrow vein | compartment Saga Shaft
underground) | (previously Mid-Royal
| Ventilation Shaft) to Level 5
* FY 2010/11: targeted production of | (200 metres below surface)
100,000 ozs at cash costs circa US$190 |
per oz |
* FY 2011/12: targeted production of | Co-O MINE & REGIONAL DRILLING
120,000 to 130,000 ozs at cash costs |
circa US$190 per oz | * Drilling is continuing with
| six surface rigs and four
| underground rigs for resource
* Current Mineral Resources comprise | definition, delineation of new
* Co-O Mine: Indicated 603k ozs at | veins to the north of the
13.2 g/t gold; Inferrred 898k ozs | current resources and
at 9.6 g/t gold | extensions of known veins
* Bananghilig: Inferred 650k ozs at |
1.3 g/t gold |
| * A drilling update is expected
| during the next quarter
* Current Probable Reserves : Co-O Mine |
505k ozs @ 10.7 g/t gold |
| BANANGHILIG DEPOSIT
|
* Co-O Mine Resources and Reserves to be | * Drilling is underway with
maintained at current levels | two rigs and with up to
| four more rigs to be added
| during the next quarter
* Conceptual exploration target size ** of|
Co-O Mine of 3 to 7 million ozs |
| SAUGON PROJECT
|
* Excellent exploration upside: high grade| * Drilling with three rigs has
vein and disseminated bulk gold targets,| continued with a drilling
plus seven copper targets | update planned during the next
| quarter
|
* 820 km2 of tenements and exploration |
budget for FY 2010/11 of US$21M | FINANCIALS & CORPORATE
|
| * Total cash and gold on metal
Board of Directors: | account at end of quarter of
| approximately US$69.4 million
Peter R. Jones (Non-executive Chairman) | (unaudited)
Geoffrey Davis (CEO) |
Peter Hepburn-Brown (COO) |
Roy Daniel (CFO) | * A maiden unfranked dividend of
Robert Weinberg (Non-executive Director) | A$0.05 per share declared by
Andrew Teo (Non-executive Director) | the Board, will be paid to all
| shareholders on 8 November
Capital Structure: | 2010.
|
Ordinary shares: 187,584,911 |
Unlisted options: 1,190,000 | * The Company admitted to the
| standard listing segment of the
Listings: | Official List of the UK Listing
| Authority and commenced trading
ASX and LSE (Code: MML), TSX (Code: MLL) | of its ordinary shares on the
| Main Market of London Stock
Address and Contact Details: | Exchange plc on 28 October
PO Box 860 | 2010.
Canning Bridge WA 6153 |
Telephone : +618 9367 0601 |
Facsimile : +618 9367 0602 |
Email : admin@medusamining.com.au |
Website :www.medusamining.com.au |
| ** 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 18
|January 2010.
|
|
+-----------------------------------
PROJECT OVERVIEW
The locations of the Company's projects are shown on Figures 1 and 2 (please see
the link at the end of this announcement).
Co-O MINE
Gold Production
The production statistics for the September 2010 quarter with comparatives for
the previous four quarters are summarised in Table I.
Table I. Gold production statistics
+-----------------------+----+---------+---------+---------+---------+---------+
| | |Qtr ended|Qtr ended|Qtr ended|Qtr ended|Qtr ended|
|Period |Unit|30 Sep 10|30 Jun 10|31 Mar 10|31 Dec 09|30 Sep 09|
+-----------------------+----+---------+---------+---------+---------+---------+
|Tonnes mined (1) |WMT | 60,367| 53,872| 51,512| 54,222| 43,287|
+-----------------------+----+---------+---------+---------+---------+---------+
|Ore milled |DMT | 52,463| 60,611| 40,943| 37,588| 40,467|
+-----------------------+----+---------+---------+---------+---------+---------+
|Recovered grade |gpt | 15.77| 13.65| 20.61| 18.68| 14.78|
+-----------------------+----+---------+---------+---------+---------+---------+
|Recovery | % | 94%| 94%| 94%| 94%| 94%|
+-----------------------+----+---------+---------+---------+---------+---------+
|Gold produced (2) |ozs | 25,004| 25,012| 25,505| 21,108| 18,054|
+-----------------------+----+---------+---------+---------+---------+---------+
|Cash costs (3) |US$ | $187| $182| $180| $184| $193|
+-----------------------+----+---------+---------+---------+---------+---------+
|Gold sold |ozs | 25,659| 24,858| -| 21,108| 18,054|
+-----------------------+----+---------+---------+---------+---------+---------+
|Average gold price| | | | | | |
|received |US$ | $1,208| $1,182| -| $1,111| $975|
+-----------------------+----+---------+---------+---------+---------+---------+
Note:
1. The moisture content in wet tonnes ranges between 6 to 7%
2. Gold production is actual gold poured (and requires no further processing)
during the period and does not reflect changes in the balance of gold in
circuit. It includes any gold awaiting shipment
3. Cash costs refers to the cost of gold mined (net of development costs),
produced but not necessarily sold and includes royalties and local business
taxes of US$50 per ounce for the Sep 2010 qtr (Jun 2010 qtr: US$46/oz, Mar
10 qtr: US$48/oz, Dec 2009 qtr: US$48/oz, Sep 2009 qtr: US$34/oz, YTD:
US$46/oz)
Gold production for the quarter was in-line with budget at 25,004 ounces, at an
average grade of 15.77 g/t gold and cash costs of US$187 per ounce, inclusive of
royalties and local business taxes of US$50 per ounce. The marginal increase in
cash costs is a direct result of an increase in royalty payments which is based
on gold sales.
Medusa, an un-hedged gold producer, sold 25,659 ounces of gold at an average
price of US$1,208 per ounce during the quarter.
A breakdown of actual and forecasted production ounces and cost per ounce by
quarters for the last five quarters and the remaining three quarters of this
fiscal year is highlighted in graph 1 (please see the link at the end of this
announcement).
Co-O Mine
Mine Development
The new 60 metre inclined Sabor Shaft (previously 6W) to the Level 6 (250 metres
below surface) has been completed and development on Level 6 commenced in
August. The development is focused mainly to the east from the shaft.
Construction has commenced of a vertical 3-compartment shaft with a double drum
winder named the Saga Shaft (previously the Mid-Royal Ventilation Shaft) with
site works well advanced and emplacement of the collar underway. It is intended
that this shaft will initially be sunk to Level 5 and will result in improved
transport of men and materials and ore haulage. Completion to Level 5 is likely
in the 3rd quarter 2011.
The Alimak rise to link Level 3 to the Tinago Shaft is approximately 20 metres
excavated. A new power line is being installed to the Tinago Shaft followed by
additional exhaust fans.
Mine Production
Production has continued uninterrupted at the mine. Surface stockpiles are
approximately 24,000 tonnes of ore.
Mill Expansion
The new thickener been completed and commissioning is in progress.
Construction of a new water storage tank for mill water has commenced.
Excavation of footings is underway for the installation of two new leach tanks
to raise the leaching capacity to approximately 1,000 tonnes per day.
Power
Construction of the dedicated power line from the San Francisco sub-station to
the mill is progressing well and is expected to be energised on schedule in late
November 2010.
Drilling
Surface drilling with four rigs has continued at the Co-O Mine, mainly along the
north side of the deposit on the Royal Veins. Underground drilling with four
rigs is on-going for resource drilling and pre-development drilling.
Regional surface drilling around the Co-O Mine with two rigs is continuing, with
a drilling update expected in the next quarter.
TAMBIS-BAROBO REGION
The Tambis project, currently comprising the Bananghilig Gold Deposit and the
Kamarangan copper-molybdenum porphyry prospect (Fig. 2) (please see the link at
the end of this announcement), is operated under a Mining Agreement with Philex
Gold Philippines Inc. over Mineral Production Sharing Agreement ("MPSA")
application XIII-000022 which covers 6,262 hectares. Processing of the
application is well advanced.
Bananghilig Gold Project
Figure 2 (please see the link at the end of this announcement) shows the
location of the Bananghilig Deposit. Drilling commenced in July 2010 with two
rigs now operating and additional rigs to be added. There have been delays with
respect to rigs completing other programmes and on the delivery of two man-
portable rigs are expected to arrive during the next quarter for drilling on
some of the steeper slopes.
Detailed geological re-mapping of the diatreme breccia and surrounds, re-logging
of old drill core and other activities, including initiating base-line
environmental studies, are underway as a precursor to scoping studies.
The aim is to increase the resources to a level which could provide a 5 year
minimum mining life at a production rate of approximately 200,000 ounces per
year.
Usa Porphyry Copper-Gold Prospect
The Usa prospect located within MPSA application XIII-00077. The Company has a
Memorandum of Agreement with Corplex Resources Inc.
A programme of soil sampling over the favourable geology is in progress.
ANOLING
The Mines Operating Agreement with Alcorn Gold Resources Inc. covers MPSA
application number XIII-039 situated approximately 8 kilometres north from the
millsite as shown on Figure 2 (please see the link at the end of this
announcement). Processing of the Mineral Production Sharing Agreement is
progressing.
Mapping and sampling is continuing. Drilling will recommence when the Mineral
Production Sharing Agreement is granted.
SAUGON PROJECT
A detailed summary of previous exploration conducted in 2004 was published on
20 April 2010.
Drilling with three rigs continued during the quarter. One rig will shortly be
transferred to Bananghilig. A drilling update is expected to be published in the
next quarter.
FINANCIALS (unaudited)
As at 30 September 2010, the Company which is debt free, had total cash and cash
equivalent in gold on metal account of approximately US$69.4 million (30 Jun
2010: US$55.8 million).
During the quarter:
* the Company sold 25,659 ounces of gold at an average price of US$1,208 per
ounce (Jun 2010 qtr: 24,858 ounces of gold at an average price of US$1,182
per ounce);
* incurred exploration expenditure of US$4.9 million (Jun 2010 qtr: US$5.4
million);
* expended US$2.2 million on capital works associated with the dedicated power
line/sub-station and sustaining capital (Jun 2010 qtr: US$1.8 million); and
* spent US$3.1 million in capitalised mine development (inclusive of shaft
sinking) costs (Jun 2010 qtr: US$3.0 million).
In addition, the Company reduced its June 2010 creditors balance by
approximately US$3 million.
CORPORATE
Maiden Dividend
Following a General Meeting of members on 6 October 2010, whereby the resolution
was unanimously passed to amend the Company's Constitution to remove the
restriction that dividends can only be paid out of profits, the Board confirmed
an unfranked maiden dividend payment of A$0.05 per share. Payment of this
dividend will be on 8 November 2010.
Admission to Official List of the LSE and Cancellation on AIM
The Company's entire issued ordinary share capital of 187,584,911 ordinary
shares of nil par value (the "Ordinary Shares") was admitted to the standard
listing segment of the Official List of the UK Listing Authority and to London
Stock Exchange plc's main market for listed securities ("Admission") on 28
October 2010. Cancellation of trading in the Ordinary Shares on AIM took place
simultaneously with Admission to the main market.
Managing Director, Geoff Davis commented:
"I am pleased to report on an operational level a steady level of production
in line with advice to the market of 25,004 ounces for the first quarter of the
financial year. Completion of a thickener at the mill, commencement of a new
water storage tank, site works for two additional leach tanks and commencement
of work for the new three-compartment Saga Shaft attest to the on-going capital
works programme to improve the operational efficiencies and capacity of the
operation.
Subsequent to quarter end, shareholders of the Company at a General Meeting
approved amendments to the Company's Constitution, allowing Directors to declare
an unfranked maiden dividend of A$0.05 per share, which will be paid to all
shareholders on 8 November 2010.
In addition, the Company earlier today achieved its listing and admission to
trading on the Main Market of the London Stock Exchange, successfully graduating
from AIM."
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
Financial Adviser and Broker
Ewan Leggat/Laura Littley
Lothbury Financial Services Limited +44 (0)20 7868 2010
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 "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 Declan Franzmann, B Eng (Mining), MAusIMM. Mr Franzmann is a full-
time employee of Crosscut Consulting. Mr Franzman has sufficient experience
which is relevant to the style of mineralisation and type of deposit under
consideration and to the activity which they are undertaking to qualify as
Competent Persons 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 Franzmann 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 revised Technical Report which was filed onwww.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.
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#1456154]
Quarterly Report Images:
http://hugin.info/138050/R/1456154/396248.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Medusa Mining Ltd via Thomson Reuters ONE
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