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UPDATE: Medusa Mining enhances conceptual exploration target for Co-O mine

Published: 14:05 24 Aug 2011 BST

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Adds broker comments....

Medusa Mining (LON:MML, ASX:MML, TSE:MLL) the Philippines-focused gold miner, has revealed a significant increase in the conceptual exploration target for its Co-O mine.

Based on a new resource model for the mine and on-going exploration drilling results, the conceptual exploration target for Co-O ranges 3,000,000 ounces in 9,800,000 tonnes to 7,000,000 ounces in 23,500,000 tonnes using a grade range of 9 to 11 g/t gold with a preferred average grade of 10 g/t gold.

The company stresses the potential target size and grade is conceptual in nature, and that there has been insufficient exploration to define a mineral resource. It is uncertain if further exploration will result in the target being defined as a mineral resource.

Medusa says that the combination of past production of approximately 450,000 ounces and the current global resource of 1,960,000 ounces indicates the deposit size is approaching the lower end of the conceptual exploration target size range.

Detailed mapping and data compilation of the Co-O Mine vein system has been completed. The study reveals a well preserved, intermediate sulphidation epithermal vein system with a large near surface, mushroom-shaped argillic alteration zone measuring over 1,500 by 1,500 metres in area and which grades into propylitic alteration to the east and at depth.

The alteration and mineralisation trends indicate that the source of mineralising fluids is likely to be from beyond the current eastern end of the vein system, says the company.

Geoff Davis, chairman of Medusa, says: "The Co-O Mine continues to expand, the more we drill the more we find, and we still cannot see an end to this extensive epithermal vein system. It is currently approximately 1.6 kilometres long and open to the east, and around 750 metres wide across the strike of the veins and still open both north and south, and as shown by drilling, it is also open at depth.

Davis adds that the size of the alteration envelope suggests there is the possibility of more vein systems contributing to this very large argillic alteration zone.

“Drilling will continue with the six surface rigs and five underground rigs for the foreseeable future," he says.

Broker Fairfax welcomed today's news. In a note, it said: "The validation of the conceptual exploration target follows on the positive surprises on the gold resource, drill results, new vein systems and supports our view that Medusa can support further expansion of the mine and plant. We are buyers with a target price of 680 pence."

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