www.medusamining.com.au
Medusa Mining, a public company listed on the ASX and LSE, is an Australian based gold producer, focused solely on the Philippines. Medusa's corporate strategy is to become a mid-tier, 400,000 ounce per year, low-cost gold producer.
The Company has completed the two-phase expansion of its high grade Co-O Mine operations to a production level of 100,000 annualised ounces. The Company has approved a Phase 3 expansion to build an expanded mill with capacity for 200,000 ounces of production.
Ongoing drilling is verifying and expanding the Bananghilig Deposit with the aim of defining one million ounces of reserves to initiate feasibility studies.
Further potential upside exists for the discovery of copper and additional gold deposits within the tenement holding of more than 800km2.
Medusa Mining says it is confident about the potential of the Bananghilig gold deposit
Medusa Mining (LON:MML, ASX:MLL) this morning said it had made great strides in understanding the complex geology of the Bananghilig gold deposit in the Philippines and believes the project has the potential to grow “substantially”.
The upbeat assessment of Bananghilig follows the latest drilling results. The highlights included one hole with a 5.3 metre section, which returned a grade of 20.14 grammes of gold per tonne and another at 8.67 grammes over an 8.25 metre section.
More typical were the holes that returned grades of 2.09 grams per tonne to 2.74 grams over widths of 12 to 23 metres.
From July 24 last year to August 31 the company has drilled over 93 holes for a total of 32,000 metres and is keeping seven rigs gainfully employed.
Medusa is currently validating the existing 650,000-ounce resource at Bananghilig with the aim of extending it to a reserve in the order of 1 million 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.
Medusa owns the Co-O mine in the Philippines, which also has a targeted capacity of 200,000 ounces of the precious metal.
"We are on our way,” said a clearly excited Medusa chairman Geoff Davis.
“It is very pleasing to be able to report that new drilling is verifying and extending the historical drilling results on which the Bananghilig resource is based.
“The geology is complex but now with 93 new holes already completed, a good understanding of the geology and mineralisation controls is taking shape.
“This mineralised system has the potential to grow significantly beyond the three open zones already being defined and totalling approximately three kilometres of mineralisation.
“The diatreme breccia is open to the south below younger shallow sediments, and we expect possible additions in this direction, as well as along the extensive northeast-southwest structural corridors. Drilling will continue into 2012."
According to research from Fairfax Securities, Medusa is set to make almost £100 million in profit this year.
This is based on the company’s own forecasts that suggest it will produce 100-110,000 ounces of gold at a staggeringly low US$200 an ounce cash cost.
The Co-O mine is currently going through a major expansion programme, which is intended to increase annual production up to 200,000 ounces. The next part of this expansion will see underground development work speed up rapidly.
This accelerated development phase will however have a negative impact on mined grades for a short period – mainly in the September quarter - and cash costs will also be affected.
