Co-O Mine Shafts Update

18 October 2012

Co-O MINE SHAFTS UPDATE

(ASX & LSE: MML)

Medusa Mining Limited ("Medusa" or the "Company"), through its Philippines operating company Philsaga Mining Corporation is pleased to advise that the Baguio Shaft was re-commissioned last week, with an increased haulage capacity of 350 tonnes per day (up previously from 250 tonnes per day).

The Saga Shaft reached its target depth of 350 metres in the first week of September. With the plat cut and prepared, work on excavation of the loading chute, work shop areas and other facilities are well underway. The new winder and skips for the Saga Shaft are scheduled to be commissioned late in December.

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DISCLAIMER

This announcement may contain 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.