5th Dec 2006 07:00
Medusa Mining Limited05 December 2006 MEDUSA MINING LIMITED COMPLETION OF PHILSAGA ACQUISITION Medusa Mining Limited ("Medusa" or the "Company"), the Australian based companyoperating and developing gold mines in the Philippines, advises that theacquisition of its partner in the Co-O Mine, Philsaga Mining Corporation("Philsaga") was completed on 4th December 2006. Terms of Settlement of Philsaga Transaction At settlement, the Company paid consideration to the vendors of Philsaga of A$12million, via a combination of cash and deferred payment terms, together with theissue of 25 million shares in the Company (subject to an escrow arrangement forat least 12 months) and Medusa also paid the contractors to the mining operationa final payment of A$1 million. The full terms of settlement of the acquisition of Philsaga from the Philsagavendors are: • Final payment of A$1 million to contractors; • Yandal Investments Pty Ltd was paid in full, being A$3.584 million and issued with 6.4 million shares; • Secdea Philippines Holdings Corporation was paid in full, being A$80,000 and issued with 4 million shares; • Advanced Concept Holdings Limited was paid A$920,000 and issued with 14.6 million shares. Advanced Concept Holdings Limited has agreed to provide vendor finance for thebalance of the cash payment of A$7.416 million on the following terms: • A$2.416 million to be paid on or before 15 February 2007; • A$2.5 million to be paid on or before 15 July 2007; and • A$2.5 million to be paid on or before 15 January 2008. The above deferred payments do not include interest which has been set at 7.5%per annum. There will be no penalty for any early repayments. The deferredpayments and interest are to be secured by a charge or equivalent security overthe Co-O Mine assets. Benefits of Settlement Settlement of the Philsaga Transaction consolidates the regional tenementholdings and gives Medusa the following benefits: • Control of profitable high grade gold mining operations; • An initial production of 40,000 ounces on an annualised basis, and an increasing production profile targeting approximately 100,000 ounces on an annualised basis in late 2007 - early 2008, with anticipated production costs of approximately US$200 per ounce; • Milling facilities which are centrally located and can be expanded as production increases from multiple mines; • Interests in over 700 km(2) of prospective tenements which will facilitate modern and systematic exploration for the first time ever; and • An existing workforce, management and infrastructure that are working effectively and co-operatively with local communities. Geoffrey Davis, Managing Director of Medusa, commented: "The conclusion of the acquisition of Philsaga is a major step forward for theCompany. We now have the ability and the resources to accelerate our mining andexploration activities in line with our stated objectives. The mill is centrally located and can be expanded easily as production increasesand the tenement areas are highly prospective in the Board's view, offering thepotential for us to further increase our resource/reserves. The Board remainsvery positive regarding the prospects for the Company". For further information, please contact: Medusa Mining Limited +61 8 9367 0601Geoffrey Davis, Managing DirectorRoy Daniel, Finance Director Ambrian Partners +44 (0)20 7776 6417Richard Brown / Richard Greenfield Bankside Consultants +44 (0)20 7367 8888Michael Padley / Daniela Hale This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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