TIDMMML
RNS Number : 2470L
Medusa Mining Limited
28 July 2011
QUARTERLY ACTIVITIES REPORT
PERIOD ENDED 30 JUNE 2011
OVERVIEW:
Co-O MINE PRODUCTION & DEVELOPMENT
- Capex for new Co-O plant with capacity for 200,000 ounces per
year (750,000 tonnes per year) reduced by approximately US$10
million to US$70 million. Permitting on schedule. The SAG mill is
being ordered.
- Record annual production of 101,474 ounces at a recovered
grade of 12.63 g/t gold and cash costs of US$189 per ounce
- Quarterly production of 25,233 ounces at a recovered grade of
11.05 g/t at cash cost of US$194 per ounce
- Saga Shaft: revised plan to Level 8 depth, on-going steel sets
installation, shaft currently at 63 metres
- New Level 1 adit advanced to 235 metres
Co-O MINE RESOURCES & EXTENSIONAL DRILLING
- Global resource ounces increased by 30% to 1.96 million ounces
after production for FY11
- Drilling is continuing with six surface and five underground
rigs
- Results include 1.40 metres at 21.40 g/t gold, 4.85 metres at
12.35 g/t gold, 2.00 metres at 32.64 g/t gold, 8.65 metres at 41.43
g/t gold, 7.30 metres at 7.15g/t gold and 0.90 metres at 209.73 g/t
gold
TAMBIS AREA - BANANGHILIG DEPOSIT
- Resource validation drilling and extensional drilling with six
rigs continuing. Comprehensive update expected late in the
September quarter
- IP and ground magnetic programme continuing
SAUGON PROJECT
- Drilling continued with three rigs which are to be relocated
awaiting an IP survey results
CORPORATE & FINANCIALS (unaudited)
- Delisted from the Toronto Stock Exchange ("TSX") on 17June
2011
- Board re-structure as result of TSX de-listing
- Total cash and cash equivalent in gold on metal account at end
of quarter of approximately US$100.7 million
PROJECT OVERVIEW
The locations of the Company's projects are shown on Figures 1
and 2.
(Please see link at the end of this announcement for Figures 1
and 2)
Co-O MINE
Gold Production
The production statistics for the June 2011 quarter with
comparatives for the previous three quarters as well as the
year-to-date production statistics are summarised in Table I
below.
Table I. Gold production statistics
Qtr Qtr ended Qtr ended Qtr ended
ended 30 31 Mar 31Dec 30 Sep YTD 30
Period Unit Jun 11 11 10 10 Jun 11
Tonnes
mined WMT 69,562 71,060 61,621 60,367 262,610
Ore milled DMT 76,365 71,747 66,038 52,463 266,613
Recovered
grade gpt 11.05 11.58 13.09 15.77 12.63
Recovery % 93% 94% 94% 94% 94%
Gold
produced ozs 25,233 25,114 26,123 25,004 101,474
Cash costs
(1) US$/oz $194 $191 $185 $187 $189
Gold sold ozs 21,423 25,911 23,224 25,659 96,217
Average
gold
price
received US$ $1,518 $1,401 $1,384 $1,208 $1,371
Note:
(1) Net of development costs and includes royalties and local
business taxes
Gold production for the quarter was marginally higher than
budget at 25,233 ounces, at an average recovered grade of 11.05 g/t
gold and cash costs of US$194 per ounce, inclusive of royalties and
local business taxes. The increasing amount of development ore
treated has contributed to the slightly lower head grade during the
quarter.
Medusa, an un-hedged gold producer, sold 21,423 ounces of gold
at an average price of US$1,518 per ounce during the quarter.
A graphic of actual production ounces and cost per ounce by
quarters for the last four quarters is highlighted in Graph 1.
(Please see link at the end of this announcement for Graph
1)
Preliminary Development Timetable
Graph 2 (please see link at the end of this announcement) has
been extracted from the May 2011 Investor Presentation and shows
the Preliminary Development Timetable for the new Co-O Mill
followed by the Bananghilig Project.
New Co-O Plant
In November 2010, the Board approved the construction of a new
plant 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.
On 22 June 2011, the Company announced that it has evaluated
three sites, being two adjacent to the mine (11 kilometres from the
current mill) and the third being the complete remodelling of the
current mill site. The initial Capex was estimated at US$80 million
inclusive of mine development and Saga Shaft.
The recommendation from the Company's consulting engineers after
taking into consideration our current operating environment and
community relationships, and the availability of multiple sites for
additional tailings dams at the current mill site, was to
extensively remodel the current mill site which would maximise the
use of the existing facilities. At this point, this will result in
cost savings of around US$10 million thus reducing the estimated
Capex to US$70 million inclusive of mine development and the Saga
Shaft.
The application to upgrade the Environmental Clearance
Certificate for the current Co-O Mill has been submitted to the
Department of Environment and Natural Resources and is currently
undergoing assessment.
Preliminary works commenced in July 2011 for the replacement and
transferral of buildings and facilities around the current mill to
make room for the expansion.
Quotations have been received for the main long lead time items
for the new mill. The order for the SAG mill is currently being
placed.
Operations
Mine Development
During the quarter some sinking delays were experienced due to
sourcing sufficient and on-going quantities of the correct grade of
steel for the steel sets for the Saga Shaft. This has been
rectified and sets are now being manufactured on site and installed
as required. Following installation of the upper sets, the sinking
has reached 63 metres and the shaft plan has been finalised to
provide ore haulage from Levels 6 (250 metres below surface) and 8
(350 metres below surface). Completion is estimated to Level 6 late
in the December quarter and ore haulage from Level 6 anticipated to
commence late in the first quarter of CY 2012. A new winder for the
Saga Shaft has been ordered.
Acceleration of the lateral development is on-going to ensure
the underground infrastructure and on-vein development will be in
place as the Saga Shaft reaches Level 6, then Levels 7 and 8. This
accelerated development, from approximately 500 metres per month to
approximately 800 metres per month, is programmed to continue for
approximately the next 18 months and is increasing the proportion
of development ore supplied to the mill.
Development on Level 6 is continuing mainly to the east from the
Sabor Shaft.
The new Level 1 adit (Fig. 3) has advanced 235 metres.
Mine Production
Production has continued uninterrupted at the mine. All surface
stockpiles have been depleted and underground broken ore is
approximately 54,000 tonnes.
Mill Expansion
Installation of the two new leach tanks and the expansion and
upgrading of the gold room have been completed.
(Please see link at the end of this announcement for Graph
2)
Resource Estimate
A new resource estimate was undertaken by Cube Consulting Pty
Ltd as contained in the announcement on 27 July 2011 which contains
the plan view of the veins at Level 6 and the 3D resource model and
additional details. The resources are estimated as follows:
Table II. Mineral resource estimate at 30 June 2011
Category > 0 g/t gold
tonnes g/t gold ounces
Indicated resources 1,601,000 12.0 616,000
Inferred resources 4,747,000 8.8 1,344,000
TOTAL RESOURCES 6,348,000 9.6 1,960,000
Estimated by Cube Consulting Pty Ltd July 2011
Mine Resource Drilling
Detailed information is contained in the announcement dated 9
July 2011 which lists intersections down to 0.2 metres wide
downhole.
The surface drilling was changed to focus to the east of the
Oriental Fault in the vicinity of the Saga Shaft to facilitate mine
planning close to this major new shaft. A number of new veins have
been discovered in this area, and except for the Royal Veins which
come almost to surface, the tops of the East Agsao set of veins
where the economic grades generally start is between Level 4 and 5.
Above these levels the veins are represented by argillised faults
containing poorly formed vein material, breccias and silicification
with grades generally <2 g/t gold. The East Agsao veins are open
to the east where EXP085 intersected 25 potentially mineralised
structures (assays awaited).
Some drilling also focussed on drilling at depth on the southern
side of the mine to extend the Roysan Vein and associated veins to
depth to around Levels 6 to 8 and to the east. At present, below
Level 6, this drilling in combination with previous drilling has
outlined 14 veins to the south of the Saga Shaft with indications
of an additional three veins further to the south. The eastern-most
hole EXP083 intersected five potentially mineralised structures
(assays awaited) between 660 and 800 metres down hole.
Figure 3 (please see link at the end of this announcement) shows
the Co-O Mine MD series of diamond drill holes from MD306 to MD308
totalling 1,928 metres completed in three holes, the EXP066 to
EXP086 drill hole locations comprising 22 holes for a total of
13,302 metres up to completion of EXP086. Thirteen of the completed
holes were over 800 metres deep with the deepest hole, EXP073 at
905 metres which recorded three high grade intersections between
800 and 900 metres down hole.
Table III lists the surface diamond drilling results greater
than 3 g/t gold over >=0.5 metres from the Co-O Mine for new
drill holes MD306 to MD308 as well as results not previously
reported for MD302, MD304 and MD305.
Figure 4 (please see link at the end of this announcement) shows
the recently completed underground drilling totalling 7,102 metres
in 31 holes. Table IV lists underground drill hole results since 25
March 2011. Assays are awaited for holes L4-017, L4-021, L5-051 to
L5-052, L5-054 to L5-056, as well as L6-001 and L6-002. Additional
assays are reported for holes L3-018, L4-010 to L4-011 and L5-026
to L5-047.
Table V shows the results >3 g/t gold over >=0.5 metres
for holes EXP065 to EXP086. Additional assays are awaited for
EXP075 and EXP079 and all the assays are awaited for EXP076, EXP078
and EXP080 to EXP086. Additional assays are reported for holes
EXP053, EXP063 and EXP064.
Table III. Surface drill hole results >3 g/t gold and
>=0.5 metres downhole for new holes MD 306 to MD 308 and
additional assays for previously partly reported holes designated
**
Grade
Dip Azimuth From Width (uncut)
Hole number East North ([deg]) ([deg]) (metres) (metres) (g/t gold)
MD304 ** 614065 913089 -62 194 184.00 1.90 6.03 (*)
293.10 1.00 4.04 (*)
10.66
387.75 2.10 (*)
MD305 ** 614561 913130 -55 186 153.40 0.80 3.70 (*)
16.97
241.35 1.00 (*)
454.70 0.60 6.23 (*)
475.60 0.75 4.16 (*)
621.95 0.65 6.43 (*)
630.20 0.40 3.60 (*)
21.40
635.00 1.40 (*)
MD306 614564 913127 -59 183 370.35 1.25 4.67 (*)
433.75 5.15 4.69 (*)
483.40 1.00 3.83 (*)
505.60 1.75 4.25 (*)
533.25 1.90 8.89 (*)
687.90 1.00 8.50 (*)
711.15 1.35 4.51 (*)
25.81
MD308 614198 912986 -48 180 267.00 1.00 (*)
387.10 2.50 4.29 (*)
391.70 2.30 3.40 (*)
11.10
396.70 0.80 (*)
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 IV.Underground drill hole results >=3 g/t gold and
>=0.5 metres downhole and additional assays for previously
partly reported holes designated **
Grade
(uncut)
Dip Azimuth From Width (g/t
Hole number East North ([deg]) ([deg]) (metres) (metres) gold)
LEVEL 4
L4-010
** 613563 912804 3 359 43.35 3.05 6.34
L4-011
** 613561 912804 3 322 51.85 0.50 3.78 (*)
10.87
L4-013 613731 912737 3 230 13.30 0.65 (*)
11.87
95.90 0.55 (8)
44.90
L4-022 613976 912906 3 219 29.80 0.65 (*)
38.00 3.80 5.77 (*)
LEVEL 5
L5-026
** 143.25 0.75 24.71
L5-029
** 613941 912888 -21 219 127.40 1.30 6.07 (*)
L5-030
** 614137 912894 -19 174 136.15 1.15 3.15 (*)
161.10 2.25 6.07 (*)
181.10 0.75 8.36
L5-031
** 613945 912887 0 140 138.95 0.95 24.28
L5-036 20.00
** 614140 912897 -21 146 56.65 1.00 (*)
64.15 0.65 20.64
193.20 0.65 5.48
281.35 0.60 22.93
L5-037
** 613941 912887 -21 229 40.70 0.70 26.18
L5-038
** 614140 912897 -33 145 66.60 0.70 10.71
79.80 0.70 5.88
243.00 0.90 4.89
L5-039
** 613943 912887 -53 187 177.20 0.70 6.07 (*)
Grade
(uncut)
Hole Dip Azimuth From Width (g/t
number East North ([deg]) ([deg]) (metres) (metres) gold)
L5-040 ** 614146 912930 -33 139 66.50 1.10 53.39 (*)
147.35 0.65 5.13 (*)
161.20 1.60 4.96 (*)
L5-041** 613943 912887 -53 183 60.80 0.55 5.63 (*)
174.10 1.30 33.20 (*)
L5-043 ** 613943 912887 -33 183 62.05 0.55 14.39
L5-044 ** 614136 912893 -33 194 66.35 1.05 6.80 (*)
137.15 4.85 12.36 (*)
175.90 0.70 4.00 (*)
203.50 0.55 37.33 (*)
221.35 2.05 5.48 (*)
L5-045 ** 613943 912887 -66 183 12.30 0.95 4.18
75.05 1.45 4.62
170.30 0.70 8.46
L5-046 ** 614136 912893 -48 194 117.15 1.45 11.39 (*)
207.80 1.25 15.90 (*)
L5-047 ** 613944. 912887 -58 178 179.00 1.10 10.90 (*)
181.20 2.25 11.30 (*)
L5-048 614136 912894 -48 183 134.15 1.45 54.93 (*)
159.80 1.50 16.13 (*)
206.00 0.50 21.00 (*)
L5-049 613944 912887 -47 178 61.70 0.50 9.27 (*)
115.50 1.40 4.04 (*)
125.15 1.25 22.13 (*)
153.20 2.00 32.64 (*)
L5-050 614140 912897 -48 174 74.65 1.05 9.701 (*)
91.50 0.50 12.73 (*)
128.25 8.65 41.43 (*)
140.35 0.60 93.07 (*)
148.10 1.50 3.77 (*)
152.30 0.40 12.53 (*)
161.20 1.00 14.96 (*)
L5-053 614141 912898 -48 180 77.55 1.00 4.35
179.35 0.50 26.84
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 co-ordinates based on the Philippine Reference System
92.
Table V. Regional drill hole EXP 066 to 086 results >3g/t
gold and >=0.5 metres downhole and additional assays for
previously partly reported holes designated *
Grade
(uncut)
Hole Dip Azimuth From Width (g/t
number East North ([deg]) ([deg]) (metres) (metres) gold)
EXP053 18.30
** 613433 913647 -50 180 561.85 0.85 (*)
11.38
652.70 1.25 (*)
659.05 0.60 7.89 (*)
661.15 1.35 4.13 (*)
680.60 0.95 7.16 (*)
712.65 1.05 3.86 (*)
813.05 0.85 5.59 (*)
816.60 0.25 7.83 (*)
EXP064
** 613972 913316 -50 160 348.50 1.00 3.42 (*)
599.40 1.00 5.20 (*)
EXP065 614173 913226 -50 160 551.00 0.60 8.73 (*)
591.15 2.20 4.40 (*)
770.45 1.65 9.42 (*)
EXP067 614484 913297 -50 160 296.35 1.00 5.32 (*)
561.15 1.75 3.15 (*)
564.50 8.30 3.87 (*)
689.30 0.90 3.23 (*)
714.55 2.10 5.90 (*)
EXP068 614220 913248 -50 160 403.60 0.80 3.33 (*)
15.80
651.00 0.60 (*)
655.70 0.75 5.67 (*)
668.15 0.55 5.34 (*)
707.35 0.60 3.33 (*)
733.60 1.00 6.70 (*)
735.50 1.50 7.95 (*)
787.80 0.85 6.23 (*)
EXP069 614333 913247 -50 160 74.50 0.85 19.43
12.40
386.60 0.50 (*)
11.41
397.35 1.65 (*)
411.25 0.75 5.77 (*)
573.35 0.70 8.33 (*)
11.34
597.30 1.70 (*)
793.40 0.50 3.87 (*)
EXP070 614398 913159 -50 160 84.20 0.65 5.17 (*)
13.14
375.35 2.15 (*)
444.45 8.85 5.23 (*)
472.75 11.75 5.99 (*)
10.28
542.40 2.85 (*)
591.35 0.50 4.33 (*)
EXP071 614505 913364 -50 160 298.75 1.00 4.53 (*)
572.05 3.90 7.76 (*)
750.70 1.00 3.26 (*)
14.09
EXP072 614503 912978 -50 180 316.60 2.95 (*)
24.87
371.80 0.70 (*)
29.17
390.00 0.50 (*)
398.80 1.00 4.67 (*)
16.80
485.20 0.70 (*)
13.03
488.55 1.35 (*)
544.20 1.00 6.67 (*)
Grade
(uncut)
Hole Dip Azimuth From Width (g/t
number East North ([deg]) ([deg]) (metres) (metres) gold)
EXP073 614271 913339 -50 160 443.25 0.80 8.03
635.10 2.65 6.56 (*)
780.30 1.45 3.14 (*)
790.90 0.75 56.64 (*)
799.75 7.30 7.15 (*)
899.80 0.60 20.46 (*)
EXP074 614212 913281 -50 160 164.00 0.65 3.86 (*)
429.50 0.70 8.03 (*)
457.40 0.80 8.70 (*)
487.70 1.05 3.24 (*)
571.20 1.60 13.16 (*)
801.95 1.00 5.90 (*)
816.70 2.25 5.21 (*)
EXP075 614142 913293 -50 160 448.05 0.75 4.09 (*)
462.20 1.75 3.90 (*)
EXP077 614408 912982 -50 180 237.40 1.65 7.35 (*)
305.35 1.75 3.07 (*)
338.90 1.75 4.48 (*)
469.25 0.70 15.85 (*)
208.73
EXP079 614559 913379 -50 160 263.30 0.90 (*)
535.10 1.00 4.02 (*)
768.15 0.50 3.78 (*)
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.
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 was 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 8
hours, crushed to less than 1.25 cm by jaw crusher, re-crushed to
less than 3 mm using a secondary crusher followed by ring grinding
of 700 to 800 grams of sample to nominal particle size of less than
200 mesh. Barren rock wash is used between 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.
Check assaying of approximately 50% of samples used in the
yearly resource estimates is undertaken by McPhar Geoservices Phils
Inc ("McPhar"), a NATA and ISO 9001/2000 accredited laboratory in
Manila. The pulps are airfreighted to McPhar 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 McPhar as an
independent laboratory have been given priority over the Company
laboratory's results.
(Please see link at the end of this announcement for Figures 3
and 4)
TENEMENTS
Subsequent to the March 2011 quarterly report, the Company has
been advised of a clerical error regarding the newly granted
Exploration Permits ('EPs") as previously reported. The corrected
numbers for these tenements are EPs 031-XIII and 032-XIII
(previously reported as EPs 030-XIII and 031-XIII
respectively).
TAMBIS REGION
The Tambis project, currently comprising the Bananghilig Gold
Deposit and the Kamarangan copper-molybdenum porphyry prospect
(Fig. 5), 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
Validation drilling of the resource and extensional and scout
drilling is continuing with six rigs. It is planned to commence
drilling at the Canugas gold target (Figs 5 and 6) during July with
a seventh rig.
An extensive Induced Polarisation ("IP") and ground magnetics
programme is underway.
A comprehensive update on the Bananghilig drilling is planned
for late in the September 2011 quarter.
TAMBIS REGIONAL GEOLOGICAL SETTING
A comprehensive regional mapping and sampling programme
commenced in late CY 2010. The following sections are extracted
from the announcement dated 10 May 2011 which contains additional
detailed information.
The Tambis regional geology typifies a structurally complex
intermediate-sulphidation, epithermal gold, breccia-type system,
including disseminated gold overprinting the host Tertiary-age
igneous package which had been emplaced into an andesitic volcanic
basement. The fertile igneous suite comprises a multi-phase
calc-alkaline, high level, sub-volcanic intrusive package cut by
extensive bodies of phreatomagmatic diatremes and hydrothermal
breccias.
LOCAL GEOLOGICAL SETTING
Figure 5 (please see link at the end of this announcement) shows
the geological setting which is characterised by a shallowly eroded
extensive volcanic and sub-volcanic intrusive, multi-phase diatreme
complex which is similar to the well known Philippine gold
districts of Surigao in northern Mindanao, and Baguio and Mankayan
in northern Luzon. The Baguio District is recorded as producing 28
million ounces of gold and is far from mined out.
The intrusive complex comprises predominantly andesite porphyry,
feldspar porphyry, porphyritic andesite with smaller stock-like
bodies of dioritic and dacitic composition. Figure 5 (please see
link at the end of this announcement) also radiometric anomalies
and aeromagnetic features, the copper prospects and generalised
gold prospects and vein systems.
Figure 6 (please see link at the end of this announcement) shows
the zones and names of the main mineralised quartz veins and
stockwork areas which appear to be controlled by structural
corridors which are orthogonal to the northwest-trending Barobo and
Lianga Faults which in turn are sub-parallel to the Philippine Rift
Fault direction. The main designated mineralised areas within the
northeast corridor are Supon - Bananghilig, Malinao, Tagabaca,
Canugas and Lansang which are discussed below except Malinao which
will be discussed in the update on drilling in the September
quarter.
PROSPECTS
Copper Prospects
Lower Bananghilig River copper prospect
Outcropping copper-rich quartz stockwork veining in
propylitically altered volcanics have been located over an area of
approximately 50 metres by 30 metres. Chip samples have returned up
to 0.16% copper and 0.35 g/t gold. Work is continuing to locate any
additional stockworks which may be indicative of nearby or
underlying porphyry style mineralisation.
Sawahon copper prospect
Outcrops of strong magnetite-clay-pyrite altered microdiorite
with chalcopyrite-bearing sheeted veinlets with chip assays up to
0.27% copper and 0.16 g/t gold were located in Sawahon Creek.
Reconnaissance samples of altered diorite along creeks returned up
to 0.44% copper plus 0.10 g/t gold. This zone is located near the
intersection of the Auron and Melendres Veins with the
northnorthwest-trending Canugas Landsat Lineament and the
copper-bearing veinlets are oriented parallel to the Canugas
Landsat Lineament. The extent of the outcropping mineralisation is
still being delineated.
Copper-rich quartz vein stockworks in variably silicified and
argillically altered volcanics adjacent to the western side of the
Sawahaon diorite have also been recently located and sampled.
A programme of ridge and spur sampling is planned for the
Sawahon and nearby mineralised Canugas milled breccia pipe
(described below).
Supon prospect
The Supon prospect area consists of the fertile Supon Diorite
which contains disseminated chalcopyrite, an argillised quartz
dacite porphyry, and some adjacent outcrops of oxidised
copper-bearing silicate-sulphide skarns.
Gold Veins and Stockworks
Figure 6 (please see link at the end of this announcement) shows
the four main areas of quartz veins and stockworks described below
which comprise a regional scale northeast-trending structural
corridor of anastomosing vein systems and pervasive argillic
alteration.
Gold mineralisation is present in all areas as quartz veins,
vein breccias, stockworks and silicified structures. These styles
are typical for an intermediate sulphidation, epithermal gold
breccia-type system.
Tagabaca area
There are currently two zones with potential quartz stockwork
bulk mineable mineralisation. Both are open to the northeast
towards Canugas.
Zone 1: This zone occupies an intensely altered area of
approximately 500 metres by 350 metres with three identified
sub-parallel vein zones (Polonio 2, Auron, and Melendres). Strongly
developed quartz-sulphide stockworks over a width of 35 metres were
recently mapped near the Melendres Vein. Peak gold assays from
reconnaissance sampling include 69.61, 6.90, 4.67 and 4.35 g/t
gold.
Zone 2: This zone sits along the northeast trending Polonio 1
Vein and the Canugas interpreted aeromagnetic feature. Assays from
reconnaissance sampling, include 85.79, 6.49, 5.60 and 4.39 g/t
gold.
Canugas area
The Canugas area abuts the Tagabaca prospect areas where the
four Tagabaca veins, Polonio 1, Polonio 2, Auron and Melendres
Veins, continue through the Canugas area. Two zones have been
identified so far
Zone 3: This zone comprises two areas:
i. The intersection of the Polonio 2 and Vargas Veins with the
interpreted northeast-trending Canugas aeromagnetic structure and
the north-northwest trending Canugas Landsat Lineament where quartz
stockworks have been located along road cuttings but have not yet
been sampled. Previous reconnaissance assays returned up to 3.23
g/t gold.
ii. The Canugas milled breccia trends north-northwest and is
located approximately 300 metres north of the known Sawahon
porphyry copper outcrops. It was explored and partially mined for
high grade (up to 1,000 g/t gold) mineralisation by underground
development pre-WWII and again in the 1950s through tunnelling and
drilling. The area exhibits widespread strong argillic and
chloritic alteration. The Canugas breccia pipe is at least 80
metres long by up to 17 metres wide and is composed of fragments of
sub-rounded to rounded hornblende andesite and some diorite
fragments which are all strongly silicified and with pervasive
disseminated pyrite. Some fragments also contain minor disseminated
sphalerite and galena. Other adjacent smaller pipes have also been
located as well as numerous narrow pebble dykes cross-cutting the
volcanic rocks. Rock chip assays are still pending.
Zone 4: Sawahon Copper Area. This zone is located near the
intersection of the Auron and Melendres Veins with the
north-northwest-trending Canugas Landsat Lineament and is described
in more detail in the Copper Prospect section above.
Lansang area
The Lansang area currently consists of two zones and is located
adjacent to and along strike from the Canugas prospect.
Zone 5: This is the main Lansang Vein zone which was the site of
extensive local mining in the 1990s. The main area of workings is
centred on north trending Lansang 1 and Lansang 2 Vein zones which
measure approximately 900 metres along strike and 150 metres wide.
The quartz-sulphide veins are narrow at 0.10 to 0.50 metres wide
(up to 23.49 g/t gold) but have extensive wide stockwork zones in
both walls.
Zone 6: This comprises the north-northeast-trending Emben Vein
zone. Preliminary examination of this zone shows it contains
extensive fault gouge with chalcopyrite and minor sphalerite and
galena, and patchy silicification and brecciation. Reconnaissance
samples returned assays of 9.02, 8.0, 7.93 and 5.30 g/t gold.
Further work is required.
Supon-Bananghilig area
Numerous veins and vein zones have been located within the
Bananghilig area as depicted on Figure 6 (please see link at the
end of this announcement). As a generalisation, work to date has
shown that veins and/or structures that truncate the more ductile
and permeable diatreme breccias zones tend to lose their vein style
and form corridors of more disseminated styles of mineralisation
associated with hydrothermal breccias and varying degrees of
silicification.
The Supon prospect area contains the Jimmy Vein (and other
un-named veins) which comprises epithermal vein and hydrothermal
breccias across a total width of approximately 20 metres of
variably silicified and argillised intrusives with pyrite and minor
chalcopyrite indicating the structural zones seen at Bananghilig
continue further to the southwest, a total distance from the
eastern end of the Bananghilig Deposit to Jimmy Vein of
approximately 1,000 metres. Other recently discovered old workings
to the southwest of Bananghilig also indicate possible extensions
to the southwest of the Ludetta Vein, and the Jacinto and Tinago
Veins and their splits which extend southwest under younger
limestone cover. New veins have also been recently uncovered during
construction of drill roads.
(Please see link at the end of this announcement for Figure
5)
USA PORPHYRY COPPER-GOLD PROSPECT
The Usa prospect is located within MPSA application XIII-00077
and the Company has a Memorandum of Agreement with Corplex
Resources Inc.
An IP and ground magnetic programme is planned.
(Please see link at the end of this announcement for Figure
6)
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.
An IP and ground magnetics programme is planned for later in the
year.
ANOLING
The Mines Operating Agreement with Alcorn Gold Resources Inc.
covers MPSA application 039-XIII situated approximately 8
kilometres north from the millsite as shown on Figure 2 (please see
link at the end of this announcement).
Processing of the MPSA is awaited.
Mapping and sampling is continuing. It is anticipated that
drilling may re-commence during the next quarter.
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 SDDH1 to SDDH35) 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 and 1 December 2010.
Drilling
Drilling has continued with three drill rigs however these rigs
will be re-allocated to other projects. Regional mapping and
prospect trenching are also in progress and IP programme is being
planned to cover the main de-magnetised zone.
FINANCIALS (unaudited)
As at 30 June 2011, the Company which is debt free, had total
cash and cash equivalent in gold on metal account of approximately
US$100.7 million (31 Mar 2011: US$92.4 million).
During the June 2011 quarter,
- the Company sold 21,423 ounces of gold at an average price of
US$1,518 per ounce (Mar 2011 qtr: sold 25,911 ounces of gold at an
average price of US$1,401 per ounce). Year to date gold sales
totalled US$131.96 million from the sale of 96,217 ounces of gold
at an average price of US$1,371 per ounce;
- incurred exploration expenditure of US$7.5 million (Mar 2011
qtr: US$7.1 million, YTD: US$26.7 million);
- spent US$3.0million on capital works associated sustaining
capital at the mine and mill and also costs for the new mill
construction and infrastructure (Mar 2011 qtr: US$2.4 million, YTD:
US$9.4 million); and
- spent US$4.5 million on general and accelerated mine
development, inclusive of shaft sinking costs (Mar 2011 qtr: US$4.6
million, YTD: US$14.3 million).
CORPORATE
Dividend
An interim unfranked dividend of A$0.05 per share was paid to
shareholders on 23 March 2011.
Board re-structure
Following the Board's decision to delist from the Toronto Stock
Exchange ("TSX") and to oversee the next phase of the Company's
growth and development, the Board effected the following changes to
the composition and structure of the Board on 9 June 2011.
- Mr Peter Jones stood down as Chairman and retired as
Non-executive Director,
- Mr Geoff Davis stood down as Managing Director but
re-appointed as Non-execuitve Chairman to replace Mr Jones,
- Mr Peter Hepburn-Brown was appointed Managing Director to
replace Mr Davis,
- Mr Roy Daniel retired as Finance Director but continues in his
current role of Chief Financial Officer.
Mr Ciceron Angeles was appointed Non-executive Director of the
Company on 28 June 2011.
TSX de-listing
The Company was officially delisted from the TSX on 17 June
2011.
Managing Director, Peter Hepburn-Brown commented:
"I am pleased to report that the Company's annual production of
101,474 ounces for this financial year is a new record. The
forecast production of 100,000 to 110,000 ounces for the
forthcoming financial year will allow the Company to balance
production with increasing development rates. During July 2011 we
commenced changes to the majority of our existing haulage shafts to
facilitate the increasing rate of development and set the mine up
for longer term benefits.
It is also pleasing to report an estimated US$10 million
reduction in Capex for our proposed new Co-O Mill. We are in the
final stages of preparing for the extensive remodelling and
expansion of our current millsite and expect to commence
re-location and construction of facilities during the September
quarter".
For further information please contact:
Australia
Medusa Mining Limited +61 8 9367 0601
Geoffrey Davis, Chairman
Peter Hepburn-Brown, Managing Director
United Kingdom
Fairfax I.S. PLC +44 (0)20 7598 5368
Financial Adviser and Broker
Ewan Leggat/Laura Littley
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". 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". 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". 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.
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 of
2015
- Growth underpinned by strong cashflow from Co-O Mine (narrow
vein underground)
- FY 2011/12: target 100,000 to 110,000 ozs at cash costs circa
US$200/oz
- Current Mineral Resources comprise
- Co-O Mine: Indicated 616k ozs at 12.0 g/t gold; Inferred 1344k
ozs at 8.8 g/t gold
- Bananghilig: Inferred 650k ozs at 1.3 g/t gold
- Current Probable Reserves : Co-O Mine 505k ozs @ 10.7 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
- Excellent exploration upside: high grade vein and disseminated
bulk gold targets, plus seven copper targets
- 820 km(2) of tenements and exploration budget for FY 2011/12
of US$27M
** 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.
Board of Directors:
Geoffrey Davis ((Non-executive Chairman)
Peter Hepburn-Brown (Managing Director)
Cicero Angeles (Non-executive Director)
Robert Weinberg (Non-executive Director)
Andrew Teo (Non-executive Director)
Capital Structure:
Ordinary shares: 188,233,911
Unlisted options: 1,325,000
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
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.
Click on, or paste the following link into your web browser, to
view the associated PDF document.
http://www.rns-pdf.londonstockexchange.com/rns/2470L_-2011-7-28.pdf
This information is provided by RNS
The company news service from the London Stock Exchange
END
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