Highlights of the Half Yearly Report

 ANNOUNCEMENT

27 February 2013

INTERIM FINANCIAL RESULTS

(ASX & LSE: MML)

Medusa Mining Limited ("Medusa" or the "Company"), presents its interim financial results for the six months to 31 December 2012, with a Net Profit After Tax ("NPAT") of US$28.6 million.

HIGHLIGHTS FOR THE SIX MONTHS TO 31 DECEMBER 2012:

Financials

·; Revenues of US$52.4 million compared to US$40.9 million for the corresponding period in the previous year, an increase of 28% due to marginal increase in both gold production and a higher average price received on sale of gold. Medusa is an un-hedged gold producer and received an average gold price of US$1,676 per ounce from the sale of 43,492 ounces of gold for the half-year to December 2012 (corresponding period to December 2011: 25,446 ounces at US$1,655 per ounce);

·; Earnings before interest, tax, depreciation and amortisation ("EBITDA") of US$35.3 million, (US$28.4 million in the prior corresponding period); an increase of 24%.

·; Earnings per share ("EPS") of US$0.152 on a weighted average basis is based on NPAT of US$28.6 million (six months to December 2011: EPS of US$0.127 based on NPAT of US$24.0 million);an increase of 19%.

·; The Company remains debt free and had total cash, cash equivalent in gold on metal account and bullion on hand of US$15.8 million at 31 December 2012 (corresponding period to 31 December 2011: US$80.2 million).

Operations

·; The Company produced 32,580 ounces of gold for the half-year, compared to 26,780 ounces from the previous corresponding period, at an average recovered grade of 7.82 g/t gold (six months to December 2011: 8.10 g/t gold);

·; Average cash cost for the half-year of US$300 per ounce, was higher than the previous corresponding period's costs of US$261 per ounce;

Production Guidance

The revised forecast gold production for the fiscal year to 30 June 2013 after taking into account current year to date production of 32,580 is now between 80,000 to 90,000 ounces at anticipated cash costs of US$250 per ounce.

A breakdown of actual and forecasted production ounces in calendar years (CY2011 to CY2016) and financial years (FY2012 to FY2017) is highlighted in Table below.

Preliminary Development Timetable

Dividends

The Board has temporarily suspended the payment of any dividend for the current fiscal year. In the previous half year to 31 December 2011, the Company paid an interim un-franked dividend of A$0.05 per share.

For further information please contact:

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 Mr Geoff Davis, who is a member of The Australian Institute of Geoscientists. Mr Davis is the Non-Executive Chairman of Medusa Mining Limited and has sufficient experience which is relevant to the style of mineralisation and type of deposits 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 Davis consents 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.

The complete Half Year Report for December 2012 is available for viewing on our website www.medusamining.com.au