TIDMMML
RNS Number : 7873P
Medusa Mining Limited
30 October 2012
Medusa Mining Limited
("Medusa" or the "Company")
QUARTERLY ACTIVITIES REPORT
PERIOD ENDED
30 SEPTEMBER 2012
Snapshot of Medusa:
-- Un-hedged, low cost, dividend paying gold producer focused on
organic growth in the Philippines
-- Growth path to annualised production of 400,000 ozs per year by end 2015
-- Growth underpinned by strong cashflow from Co-O Mine (narrow vein underground)
-- FY 2012/13: production guidance of 100-120,000 ozs at cash costs circa US$210/oz
-- Current Mineral Resources comprise
- Co-O Mine: Indicated 715k ozs at 11.8 g/t gold; Inferred 1,304k ozs at 9.4 g/t gold
- Bananghilig: Inferred 1,100k ozs at 1.63 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
-- Excellent exploration upside: high grade vein and
disseminated bulk gold targets, plus eight copper targets
-- 820 km(2) of tenements and exploration revised budget for FY 2012/13 of US$30M
** 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.
Board of Directors:
Geoffrey Davis (Non-executive Chairman)
Peter Hepburn-Brown (Managing Director)
Ciceron Angeles (Non-executive Director)
Robert Weinberg (Non-executive Director)
Andrew Teo (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
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).
EXECUTIVE ORDER ON MINING IN THE PHILIPPINES
The President of the Philippines on 9 July 2012 released
Executive Order No.79 ("EO") designed to improve the alignment of
the Philippines' national and regional interests with those of the
mining industry through the updating of key policies.
On 4 October 2012 the EO (as described in the 30 June 2012
quarterly report) was signed by the President. However the future
royalty rates have still not been finalised.
Co-O MINE
Gold Production
The production statistics for the September 2012 quarter with
comparatives for the previous four quarters are summarised in Table
I below.
Table I. Gold production statistics
Unit Qtr ended Qtr ended Qtr ended Qtr ended Qtr ended
30 Sep 30 Jun 31 Mar 31 Dec 30 Sep
2012 2012 2012 2011 2011
-------------------- -------- ---------- ---------- ---------- ---------- ----------
Tonnes mined WMT 70,591 74,969 85,748 71,872 41,596
-------------------- -------- ---------- ---------- ---------- ---------- ----------
Ore milled DMT 66,809 66,976 76,002 68,008 42,152
-------------------- -------- ---------- ---------- ---------- ---------- ----------
Recovered grade gpt 7.50 8.10 8.10 8.00 8.33
-------------------- -------- ---------- ---------- ---------- ---------- ----------
Recovery % 90% 92% 92% 93% 93%
-------------------- -------- ---------- ---------- ---------- ---------- ----------
Gold produced ozs 14,403 15,557 18,258 16,270 10,510
-------------------- -------- ---------- ---------- ---------- ---------- ----------
Cash costs (1) US$/oz $328 $283 $239 $242 $291
-------------------- -------- ---------- ---------- ---------- ---------- ----------
Gold sold ozs 25,000 20,000 10,000 10,000 15,446
-------------------- -------- ---------- ---------- ---------- ---------- ----------
Average gold price
received US$ $1,636 $1,624 $1,738 $1,761 $1,587
-------------------- -------- ---------- ---------- ---------- ---------- ----------
Note:
(1) Net of development costs and includes royalties and local
business taxes
Gold production for the quarter was 14,403 ounces, at an average
recovered grade of 7.50 g/t gold and cash costs of US$328 per
ounce, inclusive of royalties and local business taxes.
As has been the case for the four previous quarters, the mine
continues to operate pre-dominantly in development mode to prepare
for the future production increase and all development ore mined to
date has been treated through the mill. In addition to the heavy
emphasis on development, the mine's production has also been
hampered by shaft haulage access. The completion of the Saga Shaft
(in the December 2012 quarter) with additional haulage capacity of
1,500 tpd will solve the current shaft haulage issues.
Production for the quarter was also hampered by a fire in
mid-August which caused extensive damage to the Baguio Shaft,
temporarily putting it out of service for approximately two months.
The remedial expenses to refurbish and recommission the Baguio
Shaft have had an adverse impact on the September quarter's cash
costs which increased to US$328 per ounce (June 2012 Qtr: US$283
per ounce). These once off costs relating to the refurbishment and
recommissioning of the Baguio Shaft and balance of expenses
relating to leach tank repairs, completed in late July 2012,
amounts to approximately US$35 per ounce of this quarter's cash
costs.
Medusa, an un-hedged gold producer, sold 25,000 ounces of gold
at an average price of US$1,636 per ounce during the quarter.
Preliminary Development Timetable
Graph 1 (please see the link at the end of this announcement) is
the Preliminary Development Timetable and Production Guidance for
the new Co-O Phase 3 Mill Expansion and Bananghilig Project.
The total estimated Capex (inclusive of mine development and
shaft sinking) for the Phase 3 expansion of Co-O is US$70 million
which will be funded entirely from the Company's cash flow.
New Co-O Mill
In November 2010, the Board approved the construction of a new
mill 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.
The approval to upgrade the Environmental Clearance Certificate
for the current Co-O Mill to 2,500 tonnes per day was granted on 9
October 2012.
Operations
Mine Development
Major renovations are continuing at the Co-O Mine to modernise
the mine for its expanded production.
The Saga Shaft reached its planned depth of 350 metres in the
first week of September. The plat at Level 8 has been cut. The
loading chute is being installed and additional space for workshops
and other facilities is being excavated. Haulage capacity is
limited until the newly delivered winder is operational.
Manufacture of the permanent headframe is well advanced.
The Saga Shaft with a haulage capacity of 1,500 tonnes per day
is planned to be completed at the end of December quarter 2012 and
hauling of significant amounts of ore from Level 8 will begin once
Level 8 on-vein development advances and rises on-vein are
commenced from Level 8 through to Level 6 (100 metres vertical
distance).
At the Baguio Shaft, the top 120 metres of timber were burnt out
by the fire as reported on 22 August 2012. The shaft was returned
to service in the first week of October ahead of schedule after its
capacity was upgraded a second time to 350 tonnes per day (from 250
tonnes per day).
Accelerated lateral development is on-going to ensure the
underground infrastructure and on-vein development will be in place
for the Saga Shaft. This accelerated development was maintained at
similar levels to the previous quarter and consequently maintained
the high proportion of development ore supplied to the mill.
The average development was 970 metres and at the end of
September 2012 there were 50 development headings on-vein and 5 on
waste. Haulage was affected by the Baguio Shaft fire during the
quarter.
Mine Production
Ore trucked to the mill during the quarter was primarily
development ore and some stope ore.
Mill Expansion
The current status of activities is:
-- Construction of the new large leach tank has been completed and it is in operation;
-- Foundations for the new crusher completed;
-- SAG mill foundations advancing, SAG mill now completely delivered on schedule (Photos 1 & 2);
-- The de-toxification unit foundations are completed and steel work commenced;
The electrical supply systems to the mine and mill are
advancing. Re-wiring of the Co-O Mine through the Saga Shaft has
commenced.
Please see the link a the end of this announcement for Photos 1
and 2, showing the SAG mill 45 tonne end plate being transported
210 kilometres from Davao port to Co-O mill site and both end
plates of the SAG mill on site.
Resource Estimate
On 6 August 2012 a new resource estimate for the Co-O Mine was
announced as below:
Table II. Co-O Mine Mineral Resource estimate at 30 June
2012.
Category > 3 g/t gold
--------------------- ---------------------------------
tonnes g/t gold ounces
--------------------- ---------- --------- ----------
Indicated resources 1,890,000 11.8 715,000
--------------------- ---------- --------- ----------
Inferred resources 4,325,000 9.4 1,304,000
--------------------- ---------- --------- ----------
TOTAL RESOURCES 6,215,000 10.1 2,019,000
--------------------- ---------- --------- ----------
Notes:
- A lower cut-off of 3 g/t gold has been applied
- Variable upper cuts up to 300 g/t gold have been applied to
different veins
- Rounding to the nearest 1,000 may result in some slight
discrepancies in totals.
Additional detailed information is contained in the announcement
dated 6 August 2012. The resource estimate was undertaken by Cube
Consulting Pty Ltd of Perth Western Australia.
Reserve Estimate
As announced on 24 August 2012, the Probable Reserve at 30 June
2012 now stands at 568,000 ounces contained in 1,820,000 tonnes at
9.7 g/t gold.
Additional detailed information is contained in the announcement
dated 24 August 2012. Carras Mining Pty Ltd of Perth, Western
Australia undertook the reserve estimation based on the resource
wireframe model provided by Cube Consulting Pty Ltd.
Exploration
Drilling with six surface rigs and three underground drilling
rigs is continuing.
Preparations are underway for an extensive regional Induced
Polarisation/Resistivity ("IP/Res") and ground magnetics programme
around the Co-O Mine which is likely to be commenced in early
2013.
Please see the link at the end of this announcement for Figure 3
(please see link at the end of the announcement), Co-O Mine area
interpreted geological map
Co-O Geology and Mineralisation
New detailed discussions and interpretations of the Co-O Mine
geology and mineralisation were announced on 14 August 2012 and are
also contained in the 2012 Annual Report. These interpretations are
summarised below:
-- The Co-O Mine area is underlain gently north-dipping basaltic
andesitic to andesitic volcanic flows and minor volcaniclastics
(Fig. 3 (please see link at the end of the announcement)) which
have been intruded by andesitic to dioritic stocks and cut by
north-trending faults.
-- There are three large outcropping intrusives, namely the
Nangka, Road 17 and Pinayungan Intrusives, located east and
southwest of the Co-O vein system, and several smaller ones in the
vicinity. The Nangka and Pinayungan Stocks are in place while the
rest are "floating" in the Co-O Diatreme including the large Road
17 Mega Block.
-- Porphyry-related copper-gold mineralization is hosted only in
the Nangka Stock and the surrounding volcanics (Figs 4 to 6 (please
see link at the end of this announcement)). Generally grades range
from 0.11 to a maximum of 0.31 % Cu and 0.11 to 0.24 g/t Au with a
Cu:Au ratio of about 1:1 to 1:2. This is not primary porphyry
mineralisation.
-- After a period of substantial uplift and erosion, a
diatreme/maar complex explosively intruded all the above rock types
(Figs. 4 to 6 (please see link at the end of this announcement)).
Its presence explains the general absence of near surface
epithermal veins east of the Oriental Fault instead of invoking a
large down thrown movement of the zone as the veins are masked by
the flare of the diatreme.
-- The Co-O Diatreme is upward flaring in all directions towards
the surface, measuring about 1.5 kilometres in diameter, and
narrows down at depth like a funnel of unknown dimensions. Its root
is probably located at the southern part of the Road 17 Intrusive.
It is inferred that the diatreme may easily reach 1 kilometre or
more in depth as indicated by its surface dimension wherein the
vertical extent is more than its lateral extent. The maar
volcanics, which are the extrusive equivalent of the diatreme and
deposited by the explosive activity of the diatreme.
-- After the emplacement of the diatreme/maar complex,
mineralised hydrothermal breccias followed by epithermal gold veins
were formed, overprinting the older porphyry-related copper-gold
mineralisation. The veins generally strike west-northwest to due
west and dip 55 to 75deg to the north for all veins except the
Central Vein which is vertically dipping.
After another episode of uplift and erosion, a thin veneer of
polymictic conglomerate to a maximum thickness of about 30 metres,
was deposited on top of the diatreme/maar complex (Fig. 3 (please
see link at the end of this announcement)).
OVERVIEW:
EXECUTIVE ORDER ON MINING IN THE PHILIPPINES
-- Positive Executive Order No.79 on mining in the Philippines
was released on 9 July 2012 and signed on 4 October 2012. Changes
to royalty rates not yet set.
Co-O MINE PRODUCTION & DEVELOPMENT
-- New Mill: ECC granted. Construction on schedule. New leach
tank and foundations for crusher completed, and SAG mill
foundations advancing. SAG mill now delivered.
-- Production: 14,403 ounces at a recovered grade of 7.5 g/t
gold and cash costs of US$328 per ounce.
-- Saga & Baguio Shafts: Saga reached depth of 350 metres in
early September. Plat cut, loading chute being installed. Winder
arrived. Completion estimated late December. Baguio Shaft
recommissioned ahead of schedule.
Co-O MINE RESOURCES, RESERVES, EXPLORATION
-- The new Inferred and Indicated Resources total is 2,019,000
ounces at 10.1 g/t gold in 6,215,000 tonnes.
-- The new Probable Reserve is 568,000 ounces at 9.7 g/t gold in
1,820,000 tonnes.
-- Drilling is continuing with six surface and three underground
rigs.
TAMBIS AREA - BANANGHILIG DEPOSIT
-- New Inferred Resource of 1,100,000 ounces at 1.63 g/t gold in
21,000,000 tonnes.
-- Infill drilling has been completed with rigs reduced from 6
to 2 for sterilisation drilling. An Indicated Resource estimate is
planned during the next quarter.
LINGIG PROJECT
-- Lingig Induced Polarisation and Resistivity survey nearing
completion.
ANOLING
-- Drilling has been suspended while results are assessed.
CORPORATE & FINANCIALS (unaudited)
Total cash, cash equivalent in gold on metal account and bullion
at site at end of quarter of approximately US$37.7 million.
Implications
On the eastern side of the Oriental Fault, now that the diatreme
breccia pipe has been defined, the outcropping of northern veins
such as the Royal Vein set and the non-outcrop of others is readily
explained as the outcropping ones are not masked by the diatreme
complex. Some of the non-outcropping veins are hidden below the
flare of the diatreme and below Maar volcanics.
This new interpretation also negates the need to invoke a
substantial vertical displacement on the Oriental Fault. The
consequence is that there is now no geological reason why the vein
system on the west side of the Oriental Fault should not continue
to similar depths to those found on the eastern side of the
fault.
Health and Safety
Lost time accident frequency rate (LTAFR) for the three months
to 30 September 2012 is 0.97 including exploration. By comparison,
the latest West Australian gold mining industry figure available to
30 September 2011 was 3.10, excluding exploration statistics of
6.70.
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 (please see link at the end of the announcement)) 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 dated 6 July 2012, issued by the
President of Philippines will have no immediate impact on the
Bananghilig Project as the Company can continue to explore, conduct
feasibility studies and planning.
However, should the feasibility study be positive and the
Company commits to constructing the project, timely issuance of the
relevant permits to commence construction will be subject to
legislation of the new law on mining taxes and royalties to be
passed by Congress.
Updates will be provided as material information becomes
available.
BANANGHILIG PROJECT
In July 2010, new regional and detailed mapping and drilling
programmes were commenced with the aim of validating the current
resource of 650,000 ounces of gold and extending it to provide a
reserve of approximately 1,000,000 ounces. This reserve would form
the basis for a feasibility study which would target production of
200,000 ounces of gold per year from a new milling facility.
The announcement of 12 September 2011 summarises the Tambis
regional geological setting, local geological setting, deposit
description and mineralisation, shows a typical cross-section
through the deposit and the drill hole intersections obtained for
the period 24 July 2010 to 31 August 2011. Additional information
is contained in the September 2011 quarterly report dated 24
October 2011 and in a drilling update on 17 January 2012.
Drilling Results
A drilling results update was announced on 8 August 2012 (as
summarised in Table III) and included in the Inferred Resource
estimate which was announced on 28 August of 1,100,000 ounces at
1.63 g/t gold contained in 21,000,000 tonnes. Table IV shows the
range of resource estimates and cut-offs.
A further update of drilling results and an Indicated Resource
estimate are planned for the December quarter 2012.
Detailed drilling results are contained in the 8 August 2012
announcement and are summarised in Table III where significant
intercepts are defined on the following basis:
(i) lower cut-off grade of 0.5 g/t Au, and
(ii) >= 5 metres downhole intercept width at >= 1.0 g/t
Au, and
(iii) maximum of 3 metres of downhole internal dilution at
<=0.5 g/t Au.
Table III. Bananghilig surface drill hole results >=1g/t
gold.
Hole number East North Dip Azimuth From (metres) Width Grade
(deg) (deg) (metres) (uncut)
(g/t gold)
-------------- ---------- ------------
TDH139 612887 945049 -60 130 481.35 18.85 10.19
-------------- ---------- ------------
578.35 22.25 2.43
-------------- ---------- ------------
TDH143 612749 945658 -60 130 20.80 5.80 6.32
-------------- ---------- ------------
38.50 6.50 1.09
-------------- ---------- ------------
TDH148 612833 945612 -60 130 2.00 6.10 1.12
-------------- ---------- ------------
21.30 7.45 2.23
------------- -------- ------- ------- -------- -------------- ---------- ------------
TDH149 613016 945224 -60 130 95.05 9.95 1.51
-------------- ---------- ------------
214.25 6.25 1.46
-------------- ---------- ------------
235.40 9.50 1.43
-------------- ---------- ------------
292.10 7.05 1.95
------------- -------- ------- ------- -------- -------------- ---------- ------------
TDH151 612715 945423 -60 130 63.35 6.85 6.11
-------------- ---------- ------------
197.65 13.20 1.34
-------------- ---------- ------------
TDH154 612672 945539 -70 130 81.60 9.35 1.06
------------- -------- ------- ------- -------- -------------- ---------- ------------
TDH156 613056 945500 -60 130 259.25 12.85 1.24
-------------- ---------- ------------
451.40 6.80 1.03
-------------- ---------- ------------
495.40 5.00 1.30
------------- -------- ------- ------- -------- -------------- ---------- ------------
TDH157 612939 945229 -60 130 64.40 13.55 1.54
-------------- ---------- ------------
85.95 9.45 1.42
-------------- ---------- ------------
154.20 27.50 2.12
------------- -------- ------- ------- -------- -------------- ---------- ------------
TDH161 612834 945040 -60 130 135.20 6.00 2.02
------------- -------- ------- ------- -------- -------------- ---------- ------------
TDH162 612291 944989 -60 130 190.80 5.00 1.33
------------- -------- ------- ------- -------- -------------- ---------- ------------
TDH172 612590 945049 -60 130 59.00 11.90 1.49
------------- -------- ------- ------- -------- -------------- ---------- ------------
TDH173 612496 945386 -70 130 77.00 15.20 1.64
-------------- ---------- ------------
101.60 19.05 1.24
-------------- ---------- ------------
160.90 8.80 5.09
-------------- ---------- ------------
TDH174 612791 945115 -50 130 79.60 11.00 1.49
------------- -------- ------- ------- -------- -------------- ---------- ------------
TDH175 612623 945243 -70 130 104.75 5.00 1.23
-------------- ---------- ------------
266.25 5.45 1.26
-------------- ---------- ------------
TDH176 612534 945308 -60 130 16.50 12.80 1.47
-------------- ---------- ------------
91.10 9.70 1.29
-------------- ---------- ------------
187.05 8.80 1.09
------------- -------- ------- ------- -------- -------------- ---------- ------------
TDH177 612824 945195 -60 130 150.30 7.00 1.29
-------------- ---------- ------------
TDH180 613064. 945194 -60 130 31.95 7.85 3.33
-------------- ---------- ------------
137.10 5.30 1.38
------------- -------- ------- ------- -------- -------------- ---------- ------------
TDH181 613002 945164 -60 130 133.40 5.95 8.69
-------------- ---------- ------------
162.10 8.85 2.71
-------------- ---------- ------------
TDH182 612897 945139 -60 130 97.95 7.00 1.16
-------------- ---------- ------------
125.40 7.00 1.02
------------- -------- ------- ------- -------- -------------- ---------- ------------
TDH185 612617 945371 -60 130 12.30 10.80 2.30
-------------- ---------- ------------
78.75 9.15 9.34
-------------- ---------- ------------
131.00 8.55 1.27
------------- -------- ------- ------- -------- -------------- ---------- ------------
TDH188 612987 945220 -60 130 204.45 15.85 2.98
------------- -------- ------- ------- -------- -------------- ---------- ------------
TDH189 612656 945067 -60 130 79.00 13.95 1.38
-------------- ---------- ------------
97.00 18.40 4.29
-------------- ---------- ------------
TDH190 612897 945182 -60 130 223.60 10.20 2.36
-------------- ---------- ------------
TDH192 612667 945143 -60 130 70.85 7.25 1.55
-------------- ---------- ------------
TDH193 612772 945279 -60 130 141.20 7.00 1.88
-------------- ---------- ------------
164.70 6.15 1.93
-------------- ---------- ------------
TDH195 612811 945291 -60 130 69.75 9.50 1.05
------------- -------- ------- ------- -------- -------------- ---------- ------------
TDH196 612518 945387 -55 130 13.60 13.50 1.25
-------------- ---------- ------------
31.90 5.70 1.37
-------------- ---------- ------------
56.30 6.35 1.15
-------------- ---------- ------------
99.50 7.15 4.26
-------------- ---------- ------------
132.10 5.90 1.15
------------- -------- ------- ------- -------- -------------- ---------- ------------
TDH197 612550 945426 -60 130 1.30 17.05 1.19
-------------- ---------- ------------
131.85 13.00 1.48
------------- -------- ------- ------- -------- -------------- ---------- ------------
Hole number East North Dip Azimuth From (metres) Width Grade
(deg) (deg) (metres) (uncut)
(g/t gold)
------------- ------- ------- ------- -------- -------------- ---------- ------------
TDH198 612742 945269 -60 130 83.35 12.30 1.07
------------- ------- ------- ------- -------- -------------- ---------- ------------
TDH199 613010 945200 -60 130 167.10 7.50 1.48
------------- ------- ------- ------- -------- -------------- ---------- ------------
TDH200 612630 945014 -60 130 61.80 14.25 8.64
------------- ------- ------- ------- -------- -------------- ---------- ------------
TDH201 612815 945394 -47 130 161.20 7.00 1.78
-------------- ---------- ------------
174.75 16.05 1.05
-------------- ---------- ------------
TDH202 612707 945336 -55 130 158.25 5.20 6.04
------------- ------- ------- ------- -------- -------------- ---------- ------------
TDH203 612434 945691 -47 130 162.10 15.65 1.09
-------------- ---------- ------------
TDH204 612567 945472 -70 130 21.15 10.45 6.72
------------- ------- ------- ------- -------- -------------- ---------- ------------
TDH207 612973 945192 -60 130 199.35 5.75 1.50
-------------- ---------- ------------
TDH208 612751 945110 -60 130 116.86 13.65 1.00
-------------- ---------- ------------
TDH210 612409 945392 -60 130 29.65 6.05 1.13
-------------- ---------- ------------
38.70 5.00 1.74
------------- ------- ------- ------- -------- -------------- ---------- ------------
TDH212 612656 945098 -60 130 171.45 5.00 1.32
------------- ------- ------- ------- -------- -------------- ---------- ------------
TDH213 612645 945168 -60 130 38.70 8.00 1.32
------------- ------- ------- ------- -------- -------------- ---------- ------------
TDH214 612693 945427 -70 130 123.35 11.95 1.03
-------------- ---------- ------------
TDH215 612592 945069 -60 130 91.90 10.10 13.43
-------------- ---------- ------------
TDH216 612724 945016 -60 130 201.10 11.15 1.08
------------- ------- ------- ------- -------- -------------- ---------- ------------
TDH217 612530 945676 -60 130 2.40 16.90 1.07
-------------- ---------- ------------
94.55 6.60 1.93
------------- ------- ------- ------- -------- -------------- ---------- ------------
TDH218 612692 945013 -60 130 101.75 11.45 3.19
-------------- ---------- ------------
TDH219 613017 945269 -60 130 40.60 5.00 1.11
-------------- ---------- ------------
TDH222 612563 945047 -60 130 78.65 17.20 3.27
-------------- ---------- ------------
TDH225 612941 945303 -60 130 2.60 5.10 1.05
-------------- ---------- ------------
TDH227 612744 944950 -60 130 133.50 5.00 1.59
-------------- ---------- ------------
TDH230 612654 945663 -60 130 49.40 5.35 3.84
------------- ------- ------- ------- -------- -------------- ---------- ------------
TDH240 612452 945362 -60 130 55.20 6.50 2.08
-------------- ---------- ------------
117.50 14.05 1.41
-------------- ---------- ------------
232.60 27.20 2.91
-------------- ---------- ------------
TDH241 612517 944962 -60 130 47.45 10.25 2.00
------------- ------- ------- ------- -------- -------------- ---------- ------------
TDH246 612708 945496 -47 130 106.60 6.65 2.19
-------------- ---------- ------------
185.15 11.45 1.07
-------------- ---------- ------------
202.05 13.55 10.76
------------- ------- ------- ------- -------- -------------- ---------- ------------
Notes:
(i) Intersection widths are downhole drill widths not true widths;
(ii) Assays are by Intertek McPhar Mineral Services Inc. in Manila;
(iii) Grid coordinates based on the Philippine Reference System 92.
Resource estimation
A global Inferred Resource estimation for Bananghilig was
undertaken by Cube Consulting Pty Ltd of West Perth, Western
Australia. The estimation was based on historical drilling and new
drill hole data since July 2010.
Table IV. Inferred Resource estimate as at 31 July 2012
Cut-off (g/t tonnes g/t gold ounces
gold)
------------- ----------- --------- ----------
0.5 44,200,000 1.10 1,500,000
------------- ----------- --------- ----------
0.6 33,400,000 1.28 1,300,000
------------- ----------- --------- ----------
0.7 26,100,000 1.46 1,200,000
------------- ----------- --------- ----------
0.8 21,000,000 1.63 1,100,000
------------- ----------- --------- ----------
0.9 17,300,000 1.80 1,000,000
------------- ----------- --------- ----------
1.0 14,800,000 1.94 900,000
------------- ----------- --------- ----------
Note: Tonnes and ounces rounded down to nearest 100,000
Additional detailed information is available in the announcement
dated 28 August 2012.
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 ongoing.
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. Sizing tests are carried out on 1 in 20 assay
pulps at 75<MU>m (200 mesh) to monitor the pulverising stage.
Four 250 gram splits are obtained, one for sample analyses and the
remaining three for storage for future reference.
Standard laboratory procedure is to clean the crusher and
pulveriser after each sample treatment with barren material and/or
bowl wash, to minimise carry-over contamination.
Pulverised samples are analysed by classical fire assay
techniques on a 50 gram charge with Atomic Absorption Spectrometer
("AAS") finish. All assays over 5 g/t gold and other selected
samples are re-assayed using gravimetric fire assay techniques on a
50 gram sample.
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.
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 IP/Res and ground magnetics survey is nearing
completion.
ANOLING
The Mines Operating Agreement with Alcorn Gold Resources Inc.
covers MPSA application 039-XIII situated approximately 8
kilometres by road to the north of the millsite as shown on Figure
2 (please see link at the end of the announcement).
As outlined in the June quarterly report, drilling priorities
have been reviewed and drilling has now been suspended at Anoling
to allow an assessment of the results to be undertaken.
SAUGON PROJECT
First Hit Vein
Background
Figure 2 (please see link at the end of the 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 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 65-104.
Exploration
Regional mapping, trenching and sampling are continuing.
FINANCIALS (unaudited)
As at 30 September 2012, the Company which is debt free, had
total cash, cash equivalent in gold on metal account and bullion at
site of approximately US$37.7 million (30 June 2012: US$53.5
million).
During the September 2012 quarter,
-- the Company sold 25,000 ounces of gold at an average price of
US$1,636 per ounce (June 2012 qtr: sold 20,000 ounces at an average
price of US$1,624 per ounce);
-- incurred exploration expenditure of US$8.5 million (June 2012 qtr: US$11.6 million);
-- spent US$6.5 million on capital works, associated sustaining
capital at the mine and mill and also costs for the new mill
construction and infrastructure (June 2012 qtr: US$10.4 million);
and
-- spent US$7.4 million on general and accelerated mine
development, inclusive of shaft sinking costs (June 2012 qtr:
US$7.4 million).
CORPORATE
A final unfranked dividend of A$0.02 per share was paid to
shareholders on 4 October 2012.
There was no foreign conduit income attributed to the dividend,
and the total amount paid, inclusive of associated costs was
approximately A$3.8 million.
Peter Hepburn-Brown, Managing Director of Medusa, commented:
"Major advances have been made during the quarter as we
consolidate our expansion activities.
The Saga Shaft reached depth on schedule and is now being set up
at Level 8 for commissioning in late December. Equipping the shaft
and installation of the winder is now progressing, as well as the
new electrical systems.
Good progress has been made at the mill with the completion of
the foundations for the crusher and the detoxification unit,
completion of the large leach tank, and commencement of the SAG
mill foundations. The SAG mill has now also been delivered on
schedule.
The fire at the Baguio Shaft has allowed us to upgrade it a
second time to 350 tonnes per day capacity. The shaft was
re-commisioned in the first week of October well ahead of our
initial estimate
Cash costs for the quarter have increased as a result of the one
off costs associated with the refurbishment and recommissioning of
the Baguio Shaft and also the balance of the expenses associated
with the leach tank repairs that were completed in late July
2012."
For further information please contact:
Australia
Medusa Mining Limited +61 8 9367 0601
Peter Hepburn-Brown, Managing
Director
United Kingdom
SP Angel Corporate Finance LLP
(Financial Adviser & Broker) +44 (0)20 3463 2260
Ewan Leggat/Laura Littley
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 Mr Geoff
Davis, who is a member of The Australian Institute of
Geoscientists. Mr Davis is the Non Executive 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.
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 Figures and Preliminary Development Timetable, please
click on or paste the following link in your browser:
http://www.rns-pdf.londonstockexchange.com/rns/7873P_-2012-10-29.pdf
This information is provided by RNS
The company news service from the London Stock Exchange
END
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