TIDMMML
RNS Number : 5046K
Medusa Mining Limited
31 July 2013
Medusa Mining Limited
("Medusa" or the "Company")
31 July 2013
QUARTERLY ACTIVITIES REPORT
PERIOD ENDED 30 JUNE 2013
Snapshot of Medusa:
-- Un-hedged, low cost, gold producer focused on organic growth in the Philippines
-- Commissioning of new mill in August 2013
-- Current production reduced due to narrow veins on 8L near the L8 shaft
-- Bananghilig Scoping Study being reviewed
-- Safety FY2013 - LTIFR = 0.10
Board of Directors:
Geoffrey Davis
(Non-executive Chairman)
Peter Hepburn-Brown
(Managing Director)
Raul Villanueva
(Executive Director)
Ciceron Angeles
(Non-executive Director)
Robert Weinberg
(Non-executive Director)
Andrew Teo
(Non-executive Director)
Gary Powell
(Non-executive Director)
Capital Structure:
Ordinary shares: 188,903,911
Unlisted options: 1,715,000
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
OVERVIEW:
-- CPC Engineering ("CPC") appointed as the new Co-O Mill
expansion managers following the appointment of External
Administrators to Arccon (WA) Pty Ltd (announcement 8(th) July
2013).
-- Commissioning of the Co-O Mill delayed by approximately four
to five weeks and will be completed in early August 2013. Arccon's
administration has had no other effect on the Company's
operations.
-- Due to the current subdued gold price and the delay to the
commissioning of the new Co-O Mill, operations efficiency and costs
are continually being reviewed.
-- Bananghilig feasibility study status being reviewed in light
of lower gold price and recent discovery of the new higher grade B2
zone.
EXECUTIVE ORDER ON MINING IN THE PHILIPPINES
-- New legislation on mining taxes and royalties is yet to be
finalised for consideration by Congress.
Co-O MINE PRODUCTION & DEVELOPMENT
-- New Mill: Crusher and SAG mill commissioning in August.
-- Production: 15,642 ounces at a recovered grade 5.97 g/t gold
and cash costs of US$355 per ounce. Production reduced during June
quarter as a result of narrower veins than expected near the L8
shaft.
-- Production guidance: 17,000 ozs for September 2013 Quarter
and 35,000 ozs for December 2013 Quarter.
-- L8 Shaft (formerly Saga shaft): operating, 350 metres of
driving completed. One Alimak ore pass completed from Level 8 to
Level 6.
EXPLORATION
-- Exploration drilling now reduced to 2 surface and 2
underground drill rigs, decreasing exploration expenditure from
approximately US$25 million in FY2013 to approximately US$12
million in FY2014.
TAMBIS AREA - BANANGHILIG GOLD DEPOSIT
-- One rig completing sterilisation drilling to delineate areas
for plant site, tailings and waste storage facilities. Geotechnical
drilling for tailings dam, waste and mill plant areas will be
completed in September Quarter.
-- Two rigs drilling the new B2 area
CORPORATE & FINANCIALS (unaudited)
-- Total cash and cash equivalent in gold on metal account at
end of quarter of approximately US$7.45 million.
-- Overdraft facilities arranged with two Philippine banks totalling US$14 million.
PROJECT OVERVIEW
The locations of the Company's projects are shown on Figures 1
and 2 (see link at the end of this announcement).
HEALTH, SAFETY and ENVIRONMENT
Lost time accident frequency rate (LTIFR) for the twelve months
to 30 June 2013 is 0.10 including exploration.
There was one Lost Time Accident for the 2012/2013 year.
There were no breaches of any of the project's operating
regulations during the quarter.
EXECUTIVE ORDER ON MINING IN THE PHILIPPINES
On 06 July 2012, Philippine President Benigno Aquino III signed
Executive Order No. 79 entitled "Institutionalizing and
Implementing Reforms in the Philippine Mining Sector Providing
Policies and Guidelines to Ensure Environmental Protection and
Responsible Mining in the Utilization of Mineral Resources" ("EO
79").
On 10 September 2012, the Department of Environment and Natural
Resources ("DENR") issued Administrative Order No. 2012-07 ("Rules
and Regulations to Implement EO-79" or "EO-79 IRR"), and on 08
October 2012, issued Administrative Order No. 2012-07-A2 ("EO-79
Amended IRR") to revise Sections 3, 7 and 9 of EO-79 IRR. EO-79 IRR
and its amendments took effect on October 25, 2012.
The implications of the EO-79 with regards to the Company's
projects are discussed in the June 2012 and September 2012
quarterly reports to the ASX. There has been no change in the
Company's view since then.
The new legislation on mining taxes and royalties is yet to be
finalised for submission to Congress.
On March 07, 2013, the Secretary of the Department of
Environment and Natural Resources (DENR) approved the lifting of
the moratorium on acceptance of applications for Exploration
Permits and Financial and Technical Assistance Agreements.
MINERAL RESOURCES and ORE RESERVES
The Company's 2012/2013 resources (including the Saugon
resource) and ore reserves are shown in Table I. The table does not
include any mining depletion for the year.
The new resources and reserves for 2013/2014 will be announced
in August 2013.
Table I: Mineral Resources and Ore Reserves 2012/2013
Deposit Category Tonnes Grade Ounces
g/t gold gold
-------------------------- ------------- -------------------- ---------- ----------
RESOURCES
-------------------------- ------------- -------------------- ---------- ----------
Co-O Resources Indicated 1,890,000 11.8 715,000
-------------------------- ------------- -------------------- ---------- ----------
Inferred 4,325,000 9.4 1,304,000
---------------------------------------- -------------------- ---------- ----------
Indicated &
Total Co-O Resources Inferred 6,215,000 10.1 2,019,000
-------------------------- ------------- -------------------- ---------- ----------
Bananghilig Resources Indicated 11,900,000 1.59 608,000
-------------------------- ------------- -------------------- ---------- ----------
Inferred 9,000,000 1.62 472,000
---------------------------------------- -------------------- ---------- ----------
Total Bananghilig Indicated &
Resources Inferred 20,900,000 1.60 1,080,000
-------------------------- ------------- -------------------- ---------- ----------
Saugon Resources Indicated 47,500 6.99 10,700
-------------------------- ------------- -------------------- ---------- ----------
Inferred 34,000 4.55 5,000
---------------------------------------- -------------------- ---------- ----------
Indicated &
Total Saugon Resources Inferred 81,500 5.97 15,700
-------------------------- ------------- -------------------- ---------- ----------
Indicated &
TOTAL RESOURCES Inferred 27,196,500 3.56 3,114,700
-------------------------- ------------- -------------------- ---------- ----------
Total Indicated
Resources 13,837,500 3.00 1,333,000
----------------------------------------- -------------------- ---------- ----------
Total Inferred Resources 13,359,000 4.15 1,781,000
----------------------------------------- -------------------- ---------- ----------
RESERVES
-------------------------- ------------- -------------------- ---------- ----------
Co-O Reserves Probable 1,820,000 9.7 568,000
-------------------------- ------------- -------------------- ---------- ----------
Note: Resources include reserves
Co-O MINE
Gold Production
2012/2013 Financial Year quarters are summarised in Table II
below.
Table II: Gold production statistics
Unit Qtr ended Qtr ended Qtr ended Qtr ended Year
30 Jun 31 Mar 31 Dec 30 Sep to date
2013 2013 2012 2012 30 Jun
2013
-------------------- -------- ---------- ---------- ---------- ---------- ---------
Tonnes mined WMT 103,028 83,134 89,504 70,591 346,257
-------------------- -------- ---------- ---------- ---------- ---------- ---------
Ore milled DMT 92,567 73,273 76,999 66,809 309,648
-------------------- -------- ---------- ---------- ---------- ---------- ---------
Head grade g/t 5.97 6.76 8.16 7.50 7.02
-------------------- -------- ---------- ---------- ---------- ---------- ---------
Recovery % 88% 89% 90% 90% 90%
-------------------- -------- ---------- ---------- ---------- ---------- ---------
Gold produced ozs 15,642 14,021 18,177 14,403 62,243
-------------------- -------- ---------- ---------- ---------- ---------- ---------
Cash costs (1) US$/oz $355 $296 $279 $328 $313
-------------------- -------- ---------- ---------- ---------- ---------- ---------
Gold sold ozs 16,236 17,760 18,492 25,000 77,488
-------------------- -------- ---------- ---------- ---------- ---------- ---------
Average gold price
received US$ $1,410 $1,630 $1,731 $1,636 1,610
-------------------- -------- ---------- ---------- ---------- ---------- ---------
Note:
(1) Net of development costs and includes royalties and local
business taxes
The Company produced 15,642 ounces of gold for the quarter, at
an average head grade of 5.97 g/t gold and cash costs of US$355 per
ounce, inclusive of royalties and local business taxes.
Medusa, an un-hedged gold producer, sold 16,236 ounces of gold
at an average price of US$1,410 per ounce during the quarter.
Gold production for the quarter underperformed due to narrower
vein widths and lower grade in the immediate vicinity of the shaft
on Level 8 compared to that predicted by the resource model.
Cash costs for the quarter increased as a consequence of the
lower gold production (explained above) and higher power costs due
to the recent unreliability of grid power and consequential
frequent use of diesel gensets. In addition, the current mill (25
years old) requires increasingly regular on-going maintenance thus
reducing operating efficiency.
With the underperformance of Level 8 and the delay in the
commissioning of the new mill, the production forecasts for the
September and December 2013 quarters are approximately 17,000
ounces and 35,000 ounces respectively. Full FY 2014 production
guidance will be provided once the mill is fully commissioned and
further development has been completed on Level 8.
Operations
Mine Development
The L8 Shaft is operating and hauling development waste and ore.
Approximately 350 metres of Level 8 development has been completed.
The first Alimak rise from Level 8 to Level 6 is completed and the
second is being set up and will be completed in September. Ore from
these passes will be fed directly to the ore bins by conveyor. The
winze ore pass is expected to be connected from Level 6 to Level 8
in August.
Lateral development is increasing up to the target minimum rate
of 1,500 metres per month. Consequently a high proportion of
development ore will continue to be supplied to the current mill
and also ROM stockpiles.
Production
Production for Level 8 has so far underperformed due to narrower
vein width and lower grade than that predicted by the resource
model.
As frequently highlighted by the Company, drilling of narrow
epithermal veins generally provides an indication of the presence
of the gold mineralised vein but may not always provide good
quantitative data with respect to accurate grade and volume
estimations. Veins commonly pinch and swell and may be brecciated
or displaced by faults.
The Company regards the initial drilling as indicative only and
operates the policy of using drilling to locate the position and
extent of the mineralised veins. This is then followed by on-vein
development to support the drilling results, and to provide a more
accurate estimate of vein grades which results in the upgrading of
the resource category from Inferred to Indicated. The development
supports the estimation of resources and facilitates the conversion
of resources to reserves.
The veins on the Level 8 in the vicinity of the shaft, 100
metres below the current mining levels, were expected to be 1.4
metres to 5.5 metres wide according to the resource model, but on
three veins developed to date in the immediate vicinity of the
shaft, the widths have been less than 1 metre in conjunction with
extensive faulting, thus reducing the Level 8 budgeted production
during this June quarter. Priority headings are focusing on
reaching more productive zones as soon as possible.
The poor performance of Level 8 in the immediate shaft area
compared to the resource model to date has affected the production
for the June quarter. Gold production for the June 2013 quarter was
15,642 ounces and 62,243 ounces of gold for FY2013.
Due to this underperformance of Level 8 and the delay in the new
mill commissioning, the production forecast for September 2013
quarter is approximately 17,000 ounces and for December 2013
quarter is approximately 35,000 ounces. Full FY2014 forecast
production will be estimated once the mill is fully commissioned
and further development has been completed on Level 8.
Co-O Mill
Following the announcement of 21(st) June 2013 regarding the
appointment of External Administrators to Arccon (WA) Pty Ltd, who
were ECPM managers for the Co-O Mill expansion, the Company has
since appointed new managers, CPC Engineering. CPC is an
engineering design, construction and maintenance group of companies
that has gained industry-wide recognition for providing
professional services to the resources and infrastructure sectors
over the past 30 years.
CPC has mobilised commissioning personnel to site and the
current status of activities with respect to commissioning of the
new mill which has commenced are:
-- The SAG Mill is being lined with steel liners
-- Process water is being pumped through the CIL tanks, cyanide detox plant and SAG mill
-- High Voltage (HV) has been switched on to the new milling area
-- Tailings Pumps have been switched on
Commissioning is expected to be completed in early August
following which the first ore will be fed into the mill. This will
commence the ramp up period.
Co-O Mine Drilling
Surface exploration drilling was carried out in the South Agsao
area during the quarter with 2 diamond drillholes (EXP236 &
EXP237) completed for a total advance of 1,048.8 metres.
Underground drilling was carried out during the quarter
utilising 2 large and 2 smaller portable diamond rigs. A total of 9
holes were completed at Levels 2, 3 and 8 for an advance of
1,090.40 metres.
Currently there are four diamond drill rigs operating two on
contract, and two owned by the Company on Levels 3 and 8.
Table III: Co-O surface and underground drill hole results of
>=0.5 metres at >=3 g/t gold.
Hole East North Depth Dip Azimuth From Width Gold Grade
Number (4) (4) (metres) (o) (o) (metres) (2) (1,3)
(metres) (uncut)
(g/t gold)
------------ ------- ------- ---------- ----- -------- ---------- ---------- ------------
SURFACE EXLORATION DRILL HOLES
-------------------------------------------------------------------------------------------------
EXP231 614194 913242 1034.10 -63 179 576.20 0.50 11.30
------------ ------- ------- ---------- ----- -------- ---------- ---------- ------------
620.15 0.70 6.32
------------ ------- ------- ---------- ----- -------- ---------- ---------- ------------
625.30 0.60 5.88
------------ ------- ------- ---------- ----- -------- ---------- ---------- ------------
EXP233 614263 913312 1010.70 -61 181 678.40 1.00 20.7
------------ ------- ------- ---------- ----- -------- ---------- ---------- ------------
688.30 0.65 4.40
------------ ------- ------- ---------- ----- -------- ---------- ---------- ------------
UNDERGROUND EXLORATION DRILL HOLES - LEVEL 3
-------------------------------------------------------------------------------------------------
L3-64W-001 613340 913026 296.80 3 204 217.65 0.85 6.46
------------ ------- ------- ---------- ----- -------- ---------- ---------- ------------
L3-64W-002 613339 913027 291.10 3 215 176.10 2.60 8.98
------------ ------- ------- ---------- ----- -------- ---------- ---------- ------------
L3-64W-003 613346 913028 205.50 3 116 156.00 1.00 3.40
------------ ------- ------- ---------- ----- -------- ---------- ---------- ------------
UNDERGROUND EXLORATION DRILL HOLES - LEVEL 5
-------------------------------------------------------------------------------------------------
L5-42E-034 614380 912692 424.40 -53 343 40.85 0.65 17.83
------------ ------- ------- ---------- ----- -------- ---------- ---------- ------------
70.30 0.90 6.17
------------ ------- ------- ---------- ----- -------- ---------- ---------- ------------
213.5 0.60 7.32
---------- ---------- ------------
329.10 1.00 8.50
---------- ---------- ------------
351.60 1.00 8.91
------------ ------- ------- ---------- ----- -------- ---------- ---------- ------------
L5-42E-035 614381 912692 415.50 -53 341 37.80 0.70 11.80
------------ ------- ------- ---------- ----- -------- ---------- ---------- ------------
64.75 2.15 6.66
------------ ------- ------- ---------- ----- -------- ---------- ---------- ------------
84.50 3.05 18.63
---------- ---------- ------------
159.80 1.00 5.92
---------- ---------- ------------
162.80 1.30 3.09
---------- ---------- ------------
205.75 1.00 3.43
------------ ------- ------- ---------- ----- -------- ---------- ---------- ------------
L5-42E-037 614383 912691 420.80 -53 325 113.10 1.40 10.10
------------ ------- ------- ---------- ----- -------- ---------- ---------- ------------
330.90 3.25 16.41
------------ ------- ------- ---------- ----- -------- ---------- ---------- ------------
Notes:
1. Composited intercepts' 'weighted average grades' calculated
by using the following parameters:
(i) no upper gold grade cut-off applied,
(ii) lower cut-off grade of 3.0 g/t gold, and
(iii) >= 0.5 metres down hole intercept width at >= 3.0 g/t gold;
2. Intersection widths are downhole drill widths not true
widths;
3. Assays are by Philsaga Mining Corporation's laboratory;
and
4. Grid coordinates based on the Philippine Reference System
92.
Co-O EXPLORATION
IP Survey
A ground Induced Polarisation ("IP")/ Resistivity ("RES") survey
continues within the Co-O tenements including the Co-O mine
environs. Up to the end of the June quarter, approximately 25 line
kilometres of IP survey was completed. It is anticipated that the
balance of the IP survey (230 line kilometres) will be completed
during the March 2014 quarter, with interpretation being carried
out during the March/June 2014 quarters.
Reconnaissance Programmes
Reconnaissance mapping and sampling programmes are ongoing.
TAMBIS REGION
The Tambis project comprising the Bananghilig Gold Deposit
(Figure 2, please see link at the end of this 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 (EO-79) signed on 6 July 2012, by
the President of the Philippines, will have no immediate impact on
the Bananghilig Project as the Company can continue to explore,
conduct feasibility studies and planning.
BANANGHILIG GOLD DEPOSIT
The announcement of 12 September 2011 summarises the Tambis
regional geological setting, local geological setting, deposit
description and mineralisation. Additional information is contained
in the September 2011 quarterly report dated 24 October 2011,
resource estimation update on 29 January 2013, drilling updates on
17 January 2012, 8 August 2012, 21 November 2012 and 02 April 2013,
and operations update on 08 July 2013.
Infill Resource Drilling
A 14 hole infill drilling programme (TDH287 to TDH300) was
completed, during the previous quarter, within the Bananghilig
resource area to provide additional data in two areas of the
deposit (Figure 4, please see link at the end of this
announcement). Assay results have now been received for all 14
holes and significant results reported in Table IV.
Indicated & Inferred Mineral Resource Estimation
On 29 January 2013, the Company announced the results of
resource estimation undertaken by Cube Consulting Pty Ltd of Perth,
Western Australia. The Indicated Mineral Resource estimate for the
Bananghilig Deposit, comprises 608,000 ounces of gold at 1.59 g/t
gold in 11,900,000 tonnes and an Inferred Mineral Resource of
472,000 ounces of gold at 1.62 g/t gold in 9,000,000 tonnes using a
cut-off grade of 0.8 g/t gold. The 29 January 2013 announcement
comprises a summary of the parameters utilised in the resource
estimation.
The Bananghilig resource is currently undergoing resource
estimation review to include the results of the recently completed
infill drilling programme. The resource review is expected to
include an estimate of the silver content of the deposit, and will
be included in the annual resource update in the September quarter
2013.
Bananghilig Scoping Study
On 09 April 2013, the Company published the results of a first
pass Scoping Study(1) of the Bananghilig Gold Deposit. The Scoping
Study was conducted to +/- 25% accuracy and the results considered
positive, warranting the commencement of a Feasibility Study to be
undertaken by external consultants. The Scoping Study parameters
and discussion on other parameters, including metallurgy, mining
and operations is included in the 09 and 11 April
announcements.
(1) The Scoping Study referred to in this report is based on
low-level technical and economic assessments of Indicated and
Inferred Mineral Resources, and is insufficient to support
estimation of Ore Reserves or to provide assurance of an economic
development case at this stage, or to provide certainty that the
conclusions of the Scoping Study will be realised.
B2 Discovery Area
During the previous quarter, the Company announced the discovery
of a new zone of gold mineralisation proximal to the current
Bananghilig gold deposit (Figure 3, please see link at the end of
this announcement). The results of recent drilling (refer table IV
below and announcements on 08 July 2013) are believed by the
Company to have implications for the development of the current
Bananghilig resource. There is potential for increasing the
resource base in both tonnes and gold grades, such that the
currently ongoing feasibility study will be reviewed and possibly
re-scoped.
During the June reporting period, two large capacity diamond
drilling rigs completed 4 diamond drill holes (TDH303, TDH306,
TDH308 & TDH310) for a total advance of 1,296.8 metres.
B2 Drilling Results
Drilling at B2 is continuing with two diamond rigs drilling on a
150 metre x 150 metre grid pattern. Results of the initial drilling
at B2 were announced on 02 April 2012. Results from subsequent
drilling have since been received and significant intercepts are
included in Table IV below.
Table IV: Bananghilig Resource infill and B2 Discovery Area
drill hole results >=1 g/t gold.
(Results not previously reported are marked )
Hole East North Depth Dip Azimuth From Width Gold Grade
(4) (4) (2) (1,3)
Number (metres) (o) (o) (metres) (metres) (g/t gold)
--------- ------- ------- ---------- ----- -------- ---------- ---------- ------------
BANANGHILIG RESOURCE - INFILL DRILLING
----------------------------------------------------------------------------------------------
TDH287 612444 945060 251.30 -60 130 186.10 3.30 1.64
--------- ------- ------- ---------- ----- -------- ---------- ---------- ------------
TDH288 612409 945030 270.60 -60 130 62.25 3.00 2.08
--------- ------- ------- ---------- ----- -------- ---------- ---------- ------------
176.10 9.80 1.20
--------- ------- ------- ---------- ----- -------- ---------- ---------- ------------
190.70 5.15 1.27
--------- ------- ------- ---------- ----- -------- ---------- ---------- ------------
205.75 1.85 3.15
--------- ------- ------- ---------- ----- -------- ---------- ---------- ------------
TDH289 612469 945085 258.90 -60 130 109.65 20.75 2.04
--------- ------- ------- ---------- ----- -------- ---------- ---------- ------------
162.05 4.00 2.14
--------- ------- ------- ---------- ----- -------- ---------- ---------- ------------
TDH290 612505 945244 255.60 -60 130 199.85 20.60 1.04
--------- ------- ------- ---------- ----- -------- ---------- ---------- ------------
TDH291 612824 945496 248.40 -60 130 100.00 5.45 0.75
--------- ------- ------- ---------- ----- -------- ---------- ---------- ------------
223.90 1.00 14.72
--------- ------- ------- ---------- ----- -------- ---------- ---------- ------------
241.30 6.05 1.36
--------- ------- ------- ---------- ----- -------- ---------- ---------- ------------
TDH292 612824 945555 248.90 -60 130 84.00 6.35 3.93
--------- ------- ------- ---------- ----- -------- ---------- ---------- ------------
229.10 3.05 7.79
--------- ------- ------- ---------- ----- -------- ---------- ---------- ------------
238.20 4.05 1.77
--------- ------- ------- ---------- ----- -------- ---------- ---------- ------------
TDH293 612551 945160 261.60 -70 130 57.35 4.65 1.16
--------- ------- ------- ---------- ----- -------- ---------- ---------- ------------
237.15 4.95 2.70
--------- ------- ------- ---------- ----- -------- ---------- ---------- ------------
TDH294 612810 945577 234.70 -60 130 191.35 1.00 6.77
--------- ------- ------- ---------- ----- -------- ---------- ---------- ------------
TDH295 612771 945493 229.80 -60 130 27.15 17.95 1.75
--------- ------- ------- ---------- ----- -------- ---------- ---------- ------------
90.10 9.55 1.00
--------- ------- ------- ---------- ----- -------- ---------- ---------- ------------
TDH296 612807 945515 226.30 -60 130 45.10 2.00 3.72
--------- ------- ------- ---------- ----- -------- ---------- ---------- ------------
TDH297 612713 945529 189.80 -60 130 36.75 1.00 5.72
--------- ------- ------- ---------- ----- -------- ---------- ---------- ------------
56.80 6.10 6.96
--------- ------- ------- ---------- ----- -------- ---------- ---------- ------------
TDH298 612766 945565 194.20 -60 130 67.20 4.55 3.35
--------- ------- ------- ---------- ----- -------- ---------- ---------- ------------
BANANGHILIG - B2 DISCOVERY AREA
----------------------------------------------------------------------------------------------
TDH303 613502 945189 321.60 -60 130 155.10 21.55 0.94
--------- ------- ------- ---------- ----- -------- ---------- ---------- ------------
190.85 7.45 1.51
--------- ------- ------- ---------- ----- -------- ---------- ---------- ------------
207.30 13.90 5.15
--------- ------- ------- ---------- ----- -------- ---------- ---------- ------------
229.90 10.70 19.28
--------- ------- ------- ---------- ----- -------- ---------- ---------- ------------
Notes:
1. Composited intercepts' 'weighted average grades' calculated
by using the following parameters:
(i) no upper gold grade cut-off applied,
(ii) lower cut-off grade of 0.5 g/t gold,
(iii) >= 5 metres down hole intercept width at >= 0.5 g/t gold, or
(iv) <= 5 metres down hole intercept width at >= 5 gram per metres, and
(v) maximum of 3 metres of downhole internal dilution at <=0.5 g/t gold;
2. Intersection widths are downhole drill widths not true
widths;
3. Assays are by Intertek McPhar Mineral Services Inc. in
Manila; and
4. Grid coordinates based on the Philippine Reference System
92.
Geotechnical and Sterilisation Drilling Programmes
A geotechnical drilling programme is currently underway to
investigate sites suitable for infrastructure associated with the
development of the Bananghilig resource, including plant site,
waste, tailings and process water storage facilities. A
sterilisation drilling programme is also being conducted in the
same area. To date no significant results have been received for
these areas.
Both programmes are anticipated to be completed during the
September 2013 quarter.
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, or
HQ3 (hole diameter 96 mm, core diameter 61 mm). The holes are
initially collared using PQ drillbits (hole diameter 122 mm) to
recover PQ3 core (core diameter 83 mm) until the drillbit
encounters competent ground, then the hole is cased, and the coring
bit reduced to HQ3 for the remainder of the drill hole. If
difficult conditions are encountered, then the drill bit is changed
to NQ3 (hole diameter 75 mm, core diameter 45 mm) and the hole
continued until the planned depth or bad ground conditions prevent
further drilling, whichever occurs first.
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 on-going.
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. Four 250 gram splits are obtained, one for sample
analyses and the remaining three for storage for future
reference.
Pulverised samples are analysed by classical fire assay
techniques on a 50 gram charge with Atomic Absorption Spectrometer
("AAS") finish.
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 Induced Polarisation, Resistivity and Ground Magnetics
surveys have been completed. Data processing and interpretation
have been completed by an independent geophysical consultant. A
final report is awaited prior to defining targets for drilling.
Geological mapping, test pitting and soil sampling are in
progress.
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.
SAUGON DEPOSIT
First Hit Vein
Background
Figure 2 (please see link at the end of this announcement) shows
the Saugon Deposit 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-065 to SDDH-104.
Recently, Cube Consulting Pty Ltd completed a resource estimate
for the Saugon Deposit (refer March 2013 quarterly report). A
cut-off of 2 g/t gold was used resulting in an Indicated Resource
of 47,000 tonnes at 6.99 g/t gold containing 10,700 ounces and an
Inferred Resource of 34,000 tonnes at 4.55 g/t gold containing
5,000 ounces.
Exploration
Geological mapping and sampling programmes are on-going.
FINANCIALS (unaudited)
As at 30 June 2013, the Company had total cash and cash
equivalent in gold on metal account of approximately US$7.45
million (31 Mar 2013: US$8.91 million).
During the June 2013 quarter,
-- the Company sold 16,236 ounces of gold at an average price of
US$1,410 per ounce (Mar 2013 qtr: sold 17,760 ounces at an average
price of US$1,630 per ounce). Year to date gold sales totalled
US$124.73 million from the sale of 77,488 ounces at an average
price of US$1,610 per ounce);
-- incurred exploration expenditure of US$3.6 million (Mar 2013
qtr: US$5.9 million, YTD: US$25 million);
-- incurred US$9.4 million on capital works, associated
sustaining capital at the mine and mill and also costs for the new
mill construction and infrastructure (Mar 2013 qtr: US$4.5 million,
YTD: US$44.2 million); and
-- incurred US$10.3 million on general and accelerated mine
development, inclusive of shaft sinking costs (Mar 2013 qtr: US$8.4
million, YTD: US$34.5 million).
CORPORATE
Dividend:
No dividends were paid during the June 2013 quarterly
period.
Funding:
With the current subdued gold price and the delay to the
commissioning of the new Co-O Mill caused by the situation with
Arccon, Medusa has been reviewing the efficiency of its operations
and also its costs. As a result of this review, the Company has
deemed it prudent to arrange funding facilities with two Philippine
banks. The overdraft facilities available to the Group total Php600
million (approximately US$14 million) and to date the Company has
drawn down Php120 million (approximately US$3 million).
Management changes:
Mr Peter Alphonso was appointed Chief Financial Officer on 01
July 2013 following the retirement of Mr Roy Daniel.
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 Messrs Geoff
Davis and Gary Powell who are members of The Australian Institute
of Geoscientists. Mr Davis is the Non-Executive Chairman of Medusa
Mining Limited and Mr Powell is a Non-Executive Director and both
have sufficient experience which is relevant to the style of
mineralisation and type of deposits under consideration and to the
activity which they are 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". Messrs Davis and Powell consent 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 the figures, graphs and photos, please click on or paste
the following link in your browser:
http://www.rns-pdf.londonstockexchange.com/rns/5046K_-2013-7-30.pdf
This information is provided by RNS
The company news service from the London Stock Exchange
END
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