31st Jul 2007 07:02
Medusa Mining Limited31 July 2007 MEDUSA MINING LIMITED (AIM: MML) QUARTERLY ACTIVITIES REPORT PERIOD ENDING 30 JUNE 2007 Medusa Mining Limited ("Medusa" or "The Company"), the Australian based companyoperating and developing gold mines in the Philippines, is pleased to provideits quarterly update on activities for the period ending 30 June 2007, asrequired by the Australian Stock Exchange. KEY POINTS: Co-O MINE PRODUCTION • Gold production for the quarter totalled 8,132 ozs at an average grade of 17.7 g/t gold and average cash cost of US$217 per ounce; • Production affected by local government elections and mine workforce re-organisation. Co-O EXPLORATION • New very high grade discoveries with up to 1.0 metre at 198.84 g/t gold, 2.7 metres at 92.03 g/t gold and 2.15 metres at 58.88 g/t gold. Next full drill report due in August 2007; • New Co-O Mine resource/ reserve estimations are expected by early September 2007. ANOLING • Drilling in progress with 300 metres of potentially mineralised section of the Hope Vein outlined with best intersection 4.0 metres at 17.17 g/t gold. BAROBO CORRIDOR • 16 km corridor with numerous gold targets and two porphyry copper targets identified. TAMBIS BANANGHILIG • Data compilation and drilling continuing; • Update expected in August. SINUG-ANG • Data assessment in progress. CORPORATE • Completed a fund raising of A$20.125 million before costs via the issuance of 17,500,000 shares at A$1.15 per share; • Acquisition of an uncapped 1.32% gross royalty over the Co-O Mine and surrounds for A$1.12 million. GOLD PRODUCTION The production statistics for the current financial year are summarised in Table1. Table I: Gold Production Period Ore Gold Head Cash Comments milled produced grade costs (dmt) (ozs) (g/t (US$ gold) per oz)Jul 2006to 29,075 8,484 9.1 308 Major development, stope ore andMar 2007 re-establishment of mine access. Apr to 14,241 8,132 17.7 217 Continued mine development and stopeJun 2007 ore. Grade enhanced by presence of "black leaders". TOTAL 43,316 16,616 11.9 269 The Company produced 8,132 ounces of gold at an average grade of 17.7 g/t goldand average cash production costs of US$217 per oz. The grade for the quarterhas been enhanced by the presence of "black leaders". Production was hampered during the quarter by local government elections, whichresulted in the status quo being maintained in the Company's areas of operation,and also by a re-organisation of the mine workforce which has subsequentlyincreased the efficiency of production, reduced costs and improved the overallmine operation. Co-O MINE Development on the 3050 and 3000 metre levels Development of the 3050 metre level at the bottom of the 3W shaft has progressedwell with access gained to the Central Vein, the North Vein and the Edphil Veinon the east side of the Oriental Fault, and to the Breccia Vein on the west sideof the Oriental Fault. Access to the west of the Oriental Fault along the Central Vein drive was cutoff early in the second half of the quarter by a rock fall in the main drivenear old inactive stoping and brecciated areas at the junction of the firstCentral Vein split. To ensure continuing long term safe access to the west, itwas decided to develop a new by-pass drive in waste of approximately 70 metresin length. This has been completed and has re-established access to the highgrade Central Vein extensions to the west of the previously stoped area. Thisdisruption to mine production scheduling has not impacted production for theJune quarter but will restrict production during the September quarter tosimilar levels. A new pumping station has been commissioned and two electric locomotives nowoperate on the 3050 metre level increasing the efficiency of materials handling. Stoping operations are underway on the four metre wide section of the CentralVein east of the Oriental Fault in the area where "black leaders" occur. Highgrade black leaders (local terminology) commonly contain gold grades of 200 to400 g/t. The black leaders consist of sphalerite-galena-minor pyrite and rarechalcopyrite and are usually associated with zones colloform chalcedony andcalcite. A new main haulage level development has commenced on the 3000 metre level inthe Central Vein. New Adit Development The new adit that commenced late January to service the 3W shaft is nearingcompletion. Difficult ground conditions for over more than half its length haverequired close spaced timber support and in places, concreting. This additionalintense work has considerably increased the time taken. However this new raillink will decongest the main adit and improve the overall ventilation to themine. Deep Drilling Programme description In December 2006 the Company commenced a drilling programme designed tointersect the Co-O Mine vein system at approximately 100 metres below thecurrent bottom of the mine (ie, at level 2950 metres), which is approximately200 metres below the adit to the mine (level 3150 metres). Holes are beingspaced at approximately 50 metre intervals, but the intersection depth andposition of each drill hole is dependent on topographic constraints. The nextdrilling update is expected to be available by mid-August. Intersections of >4g/t gold from the drilling are presented in Table II. It is important to note that drilling of narrow epithermal veins at bestgenerally provides only an indication of the presence of the gold mineralisedvein and rarely provides good quantitative data with respect to accurate gradeand volume estimations for some or all of the following reasons: • Veins commonly pinch and swell and may be brecciated or displaced by faults; • Gold distribution is commonly erratic, in shoots or controlled by structures within the vein; and • Drill core recovery can be reduced because of the brecciation and soft unconsolidated material and hence the recovered material may not be representative of the material drilled. Consequently, the Company regards the initial drilling as indicative only andoperates the policy of using drilling to locate the extent of the mineralisedveins. This is then followed by level development to support the drillingresults, which provides a more accurate estimate of vein grades and facilitatesthe estimation of resources. Co-O Vein System Discussion The Co-O Mine vein system trends westerly and is truncated by a majornorth-trending fault (the Oriental Fault) which has vertically downthrown thevein system on the eastern side of the fault by an estimated 300 metres andmoved the veins horizontally by approximately 20 to 40 metres, with the eastside moved to the south. The effect of the downthrow is that the Co-O veins onthe east side of the fault are not exposed at surface and the tops of the veinsappear to commence approximately 160 metres below surface and below the 3150metre adit level When the mine was originally developed in the late 1980s, the vein system hadonly been discovered on the west side of the Oriental Fault (despite explorationdrilling on the east side) and all mine development was carried out on the westside over approximately 600 metres of strike length. Drilling, which commencedin late 2004 (holes MD 1 to 8), intersected the vein system on the east side ofthe Oriental Fault and subsequently delineated the vein system over a strikelength of approximately 250 metres to east. Drilling and mapping to the east ofthe Oriental Fault have demonstrated that the Co-O Vein system is still open tothe east and is potentially over 1.5 km in length. The recent discovery by drilling of the exceptional grade Jereme and five NewCatto Veins south of the known Co-O system has enhanced the potential of theproject. These veins are further discussed below Table II. In 2006 the Company, in cooperation with the Centre for Exploration Targeting atthe University of Western Australia, contracted the services of a post graduateresearch geologist to undertake detailed studies initially on the Co-O Minefollowed by other deposits and prospects. The aim of the research is tounderstand the depth potential of the Co-O veins through determination of thetemperature of vein deposition, vein and alteration mineralogies and othercharacteristics within the regional structural framework of the mineralisingPhilippine Rift Fault system. In addition, these results would be utilised todetermine if they could be used as vectors to locate potential porphyry coppergold intrusives which the Company interprets may be the source of mineralisationwithin the Co-O aeromagnetic anomaly. In summary, the work to date has identified the following important features: • The Co-O veins are comprised of two gold bearing phases, the first being a quartz- chalcedony +/- calcite phase deposited at a temperature of approximately 180(o)C, and a second phase comprising blocky calcite-quartz + /- barite likely deposited from boiling fluids in a temperature range of 200-250(o)C, and • The top of the Co-O mineralisation formed most probably in the upper 300 metres from the surface, therefore the veins are essentially fully preserved (meaning the veins have been subjected to minimal erosion). This implies that to date the drilling is in the upper parts of the vein system and does not appear to have reached the bottom of the mineralisation with two of the deepest intersections east of the Oriental Fault returning high grades (2.70 metres at 92.03 g/t gold in MD 34 and 1.90 metres at 79.05 g/t gold in MD 44) at approximately 300 metres vertically below the mine adit. New Drill Holes MD 20 to MD 44 Results of the new diamond drill holes MD 20 to 34 are contained in Table II. On 9 July the Company announced the discovery of exceptional intersections inthe Jereme and New Catto Veins which are summarised in Table III. An updatedrilling report is due in August. Table II: Drill results >4 g/t gold for holes MD 20 to MD 34------- ------- ------ ------ ------- -------- ------- ---------Hole East North Dip Azimuth From Width Grade (uncut) (degrees) (degrees) (metres) (metres) (g/t gold)------- ------- ------ ------ ------- -------- ------- ---------MD 20 614099 913092 -51 214 230.10 1.50 16.75 -------- ------- --------- 250.25 0.85 4.22 -------- ------- --------- 265.90 0.45 7.19 -------- ------- --------- 290.70 0.60 4.92 -------- ------- --------- 311.40 4.70 57.66 -------- ------- --------- 323.10 1.70 15.76 -------- ------- --------- 333.10 1.50 4.65 -------- ------- --------- 337.05 4.55 6.98 -------- ------- --------- 352.20 0.80 11.41 -------- ------- --------- 359.60 0.80 4.14 -------- ------- --------- 361.55 1.55 15.23 -------- ------- --------- 381.95 0.35 15.56------- ------- ------ ------ ------- -------- ------- ---------MD 21 614120 913134 -50 214 41.40 0.70 13.53 -------- ------- --------- 185.90 1.80 5.04 -------- ------- --------- Hole stopped at 268.10 metres------- ------- ------ ------ ------- -------- ------- --------- MD 23 614120 913134 -56 214 45.20 1.70 8.30 -------- ------- --------- 190.80 1.40 14.77 -------- ------- --------- 349.10 0.40 7.98------- ------- ------ ------ ------- -------- ------- ---------MD 22 614025 913188 -45 210 135.50 0.55 30.95 -------- ------- --------- 161.60 0.30 14.50 -------- ------- --------- 324.15 0.65 8.78 -------- ------- --------- 360.80 4.80 8.19------- ------- ------ ------ ------- -------- ------- ---------MD 24 614026 913190 -55 210 281.25 0.55 21.47 -------- ------- --------- 357.75 1.25 12.38 -------- ------- --------- 407.60 0.60 4.76------- ------- ------ ------ ------- -------- ------- ---------MD 25 614160 913120 -49 210 309.60 1.00 5.82 (*) -------- ------- --------- 393.05 0.50 19.88 -------- ------- --------- 400.25 1.85 4.13 -------- ------- --------- 410.40 0.25 11.54------- ------- ------ ------ ------- -------- ------- ---------MD 26 614003 913253 -48 211 165.00 1.50 5.13 -------- ------- --------- 359.75 0.65 8.74 -------- ------- --------- 364.20 0.25 16.02 -------- ------- --------- 412.70 0.85 6.15------- ------- ------ ------ ------- -------- ------- ---------MD 28 614200 913075 -48.5 212 199.70 0.20 9.18 -------- ------- --------- 246.70 0.70 8.62 -------- ------- -------- 295.20 0.40 11.69 -------- ------- --------- 320.50 2.80 15.35 -------- ------- --------- 346.50 0.30 4.93 -------- ------- --------- 412.55 2.10 15.65------- ------- ------ ------ ------- -------- ------- ---------MD 29 613942 913243 -45 211 356.70 1.00 9.47------- ------- ------ ------ ------- -------- ------- --------MD 31 613842 913223 -49 200 221.10 0.30 18.08 -------- ------- --------- 325.30 1.40 14.89 -------- ------- --------- 330.50 1.50 13.73------- ------- ------ ------ ------- -------- ------- ---------MD 32 614254 913017 -51 217 282.10 0.80 5.75 -------- ------- --------- 313.80 2.30 19.30 -------- ------- --------- 321.10 1.30 16.45------- ------- ------ ------ ------- -------- ------- --------- MD 34 614285 912923 -50 227 242.40 0.60 44.60 -------- ------- --------- 304.20 0.50 18.92 -------- ------- --------- 306.50 0.80 4.12 -------- ------- --------- 354.30 2.70 92.03------- ------- ------ ------ ------- -------- ------- --------- Notes: (i) McPhar Geoservices Inc. assays are quoted where available/ (ii) (*)denotes Philsaga assays The tops of the New Catto Veins are presently believed to be between the sameelevation as the bottom of the 3W shaft at 3050 metres and the new sublevel atthe 3000 metre elevation. All veins are open in at least three directions. It isnow apparent that some of the early holes have drilled over the top of some ofthe veins or were not deep enough. Current interpretations are based on 3D plotting and modelling of the dataavailable and future interpretations may be subject to change as more databecome available. The Jereme Vein has been identified on the 3050 metre level to the south of the3W shaft but was not previously recognised as a coherent high grade vein. Table III: Initial Drill Results greater than 4 g/t gold from the Jereme and NewCatto Veins Hole East North Dip Azimuth Vein name From Width Grade (uncut)(g/t gold) (degrees) (degrees) (meters) (meters) (g/t gold)-------- ------ ------ ----- ------ ------- ------- ------ --------- MD 28 614003 913253 -48 211 NCV 2 413.00 0.90 32.32-------- ------ ------ ----- ------ ------- ------- ------ --------- MD 32 614254 913017 -51 217 Jereme 313.80 2.30 16.97 ------- ------- ------ --------- Jereme South 321.90 0.50 38.55 Split ------- ------- ------ --------- NCV 2 371.10 0.70 6.66-------- ------ ------ ----- ------ ------- ------- ------ --------- MD 34 614285 912923 -50 227 NCV 2 304.20 0.50 18.92 ------- ------- ------ --------- NCV 1 354.30 2.70 92.03-------- ------ ------ ----- ------ ------- ------- ------ --------- MD 35 614243 912851 -58 297 Jereme 198.30 0.30 34.59(*) ------- ------- ------ --------- NCV 3 209.30 0.60 75.39(*) ------- ------- ------ --------- NCV 2 253.50 0.90 9.34 ------- ------- ------ --------- NCV 1 268.50 1.70 55.77-------- ------ ------ ----- ------ ------- ------- ------ --------- MD 38 614240 912815 -47 237 NCV 1 187.90 0.30 65.56-------- ------ ------ ----- ------ ------- ------- ------ --------- MD 39 614240 912850 -58 205 Jereme 209.70 0.20 64.56(*) ------- ------- ------ --------- NCV 3 233.55 0.45 33.24(*)-------- ------ ------ ----- ------ ------- ------- ------ --------- MD 40 614173 912951 -52 245 NCV 4 312.90 1.70 10.19(*) ------- ------- ------ --------- NVC 5 324.25 1.80 10.41(*)-------- ------ ------ ----- ------ ------- ------- ------ --------- MD 41 614240 912849 -65 205 Jereme 240.60 1.00 198.84(*) ------- ------- ------ --------- NCV 3 261.55 1.35 75.98(*)-------- ------ ------ ----- ------ ------- ------- ------ --------- MD 43 614273 912908 -60 221 Jereme 277.90 0.40 19.74(*) ------- ------- ------ --------- NCV 2 360.07 0.60 6.06(*) ------- ------- ------ --------- NCV 1 383.50 2.15 58.88(*)-------- ------ ------ ----- ------ ------- ------- ------ --------- MD 44 614212 912983 -54 209 Jereme 262.80 1.95 15.39(*) ------- ------- ------ --------- NCV 3 270.45 0.70 42.29(*) ------- ------- ------ --------- NCV 2 359.60 0.50 18.23(*) ------- ------- ------ --------- NCV 1 376.90 0.20 57.19(*) ------- ------- ------ --------- NCV 4 413.60 4.50 20.05(*) ------- ------- ------ --------- NCV 5 436.90 1.90 79.05(*) -------- ------ ------ ----- ------ ------- ------- ------ --------- Notes: McPhar Geoservices Inc. assays are quoted when available; (*) Awaitingcheck assays from McPhar; and MD 28, 32 and 34 results previously reported. In summary, the new drilling east and west of the Oriental Fault hassuccessfully demonstrated a system of multiple high grade veins over a strikelength of over 500 metres which is open in most directions within a known 1500metre long vein system. A new resource/reserve estimation incorporating all relevant drill holes isexpected by early September 2007. BAROBO CORRIDOR As announced on 16 July 2007, the Barobo Corridor has been defined from regionalmapping, aerial photography and aeromagnetics and surface sampling and islocated at the northern end of the Company's tenements. The aeromagnetics,regional mapping, pan concentrate and surface sampling were completed by theCompany. All other information provided is historic. The Barobo Corridor extends over approximately 16 km straddling a major faultnamed the Barobo Fault and which parallels the main Philippine Rift Faultlocated approximately 25 km to the west. The Barobo Fault is a major aeromagnetic feature and is topographicallydistinctive. The Tambis regional area is located within a bullseye 9.5 km by 7.3 kmaeromagnetic anomaly indicative of and resulting from intense argillicalteration. This widespread alteration has been field verified in numerousplaces and is located on the south side of the intersection of two regionalscale faults, the Barobo Fault and the west-northwest trending Liang Bay Fault,and partly straddling the Barobo Fault. The faults intersect immediately to thewest of the Bananghilig Gold Mine. It should be emphasised that reconnaissance field exploration to date has beenrestricted to outcropping rocks on ridges and in creeks and silica bouldertrains with a large number of the outcrops being identified as potentiallymineralised. Various exploration methods are being assessed to provide regionalscale data for prioritising targets for additional work. Porphyry targets At the northern end of the Barobo Corridor is the Sopon porphyry copper targetwhich consists of an altered and quartz veined diorite with visible copperminerals. The diorite is associated with massive sulphide skarn-stylemineralisation which is not yet fully defined. In the 1990s stream sedimentsampling programme described below, one sample in a small creek near the Soponporphyry copper prospect recorded an anomalous value of 124 ppm copper, and astream sediment sample 2 km to the west recorded 17.3 ppm gold. A regional stream sediment sampling programme carried out in the 1990s over theentire strike length of the Company's tenements by a previous explorer locatedthe highest regional stream sediment copper values in three creeks draining theBananghilig Mine area, being 1,662 ppm, 616 ppm and 530 ppm. This programme wasnot systematic in that coverage was restricted to drainages accessed by roads,with large areas not sampled. The above stream sediment sampling programme post dates the large BLEG anomaly.The BLEG survey was a systematic programme carried out to specifically targetgold. The Sumugbong porphyry target consisting of altered and quartz veined diorite islocated to the west of the Alikway and Guinhalinan Prospects further to thesouth on the west side of the Barobo Fault. The 1990s regional stream sedimentsurvey referred to above also sampled in two creeks distant from and drainingsouthwards from this porphyry target and recorded regionally anomalous coppervalues of up 124 ppm. Gold targets A plethora of gold targets of several different styles have been located alongthe Barobo Fault over a strike length of over 10 km and still open to the south.Pan concentrates were initially employed to discriminate gold targets but thepresence of ubiquitous visible gold in all creeks has rendered pan concentratessampling as essentially non-discriminating, hence other regional methods arebeing investigated. Some of the styles are: • Silica replacement style targets in sediments: these include the Guinhalinan Prospect and number of areas to the north of Guinhalinan where silicification of limestones and siltstones has occurred, commonly controlled by numerous northeast-trending structures which may result in the development of large areas of silicification. Some of the silicified zones are also brecciated. Gold mineralisation appears to be ubiquitous in the silicified zones, along with common lead and zinc mineralisation in potentially commercial quantities. Copper mineralisation has also been identified in some areas. • Skarn style targets in limestones: some subtle aeromagnetic anomalies have been identified as containing skarn-style silica replacement in limestones with gold, lead and zinc and disseminated magnetite. Some of these bodies also contain mineralised breccia zones. • Veins: a large number of veins have been identified commonly with a northeast trend. The most consistent of these to date is the Alikway Vein where high grade mineralisation has been identified over a distance of 500 metres and is open in both directions. Numerous other veins in the Alikway vicinity, particularly to the south, have also been discovered. It should also be noted that there is a very large area of anomalous streamsediment BLEG gold values defined by an earlier explorer covering an area ofapproximately 21 km by 8 km in the area encompassing the Bananghilig Mine andSopon porphyry target and other prospective areas. TAMBIS BANANGHILIG The Tambis Bananghilig Mine is located approximately 35 km by the NationalHighway to the north of the Co-O Plant. The project is subject to on-going drilling and assessment. Undergoundexploration has been suspended while the assessment and drilling are beingadvanced. Once the assessment programme is sufficiently advanced, acomprehensive report on activities will be provided during the next quarter. SINUG-ANG The Sinug-ang Project situated immediately north of the Co-O Mine comprises twoprospects. The Banbanon Prospect is where most of the current drilling has beencompleted and was explored in the 1980s by surface sampling and drilling. TheSinug-ang prospect is located further to the north on the same vein system whichtrends in a NNW direction parallel to the Philippine Rift Fault trend. Somesmall scale mining activities of selected parts of the Banbanon Vein and withlimited lateral extent have been undertaken to a depth of approximately 130metres below surface and one shaft extends to approximately 190 metres belowsurface. Following a topographical survey, a full assessment and interpretation of alldrilling and underground mapping sampling is in progress. ANOLING The MOA with Alcorn Gold Resources Inc. covers Mining Production SharingAgreement ("MPSA") application number 039-XIII situated to the north of the Co-Omine and millsite. Following the granting of two Small Scale Mining Permits during the previousquarter, the processing of the Anoling MPSA is now being pursued. Diamond Drilling and Geology Two parallel veins trending westerly have been defined to date over respectivestrike lengths of approximately 650 metres for the Hope Vein and approximately750 metres for the Loring Vein, and both veins are open to the east. Within thelong strike lengths, drilling and surface sampling has started to definepotentially economically mineralised zones. There are also northeast trendingvein segments, such as was explored in the Alcorn exploratory shaft, but theveins on this orientation, from current information, appear to have shorterstrike lengths than the westerly-trending veins. Indications of other parallelveins have recently been located during routine mapping and drilling. Twenty diamond drill holes totalling approximately 2,269 metres have beencompleted to date to intersect veins at approximately 50 to 100 metres belowsurface. Table IV summarises all the diamond drill hole intersections greaterthan 2 g/t gold. Table IV: Summary of drilling results for holes ANL5 to ANL20 for intersectiongrades >2 g/t gold Hole East North Dip (degrees) Azimuth (degrees) From (metres) Width (metres) Grade (uncut) (g/t gold)------- -------- ------- ------ ------- ------- -------- ---------ANL 05 614662 922889 -56 3 190.25 0.95 4.39 (*)------- -------- ------- ------ ------- ------- -------- ---------ANL 06 614552 922989 -65 0 66.80 0.50 4.07 (*)------- -------- ------- ------ ------- ------- -------- ---------ANL 08 614601 922987 -60 0 59.00 0.95 2.95 (*)------- -------- ------- ------ ------- ------- -------- ---------ANL 09 614508 922984 -60 0 55.90 2.70 13.96 (*)------- -------- ------- ------ ------- ------- -------- ---------ANL 11 614480 922980 -50 0 65.45 0.45 7.77------- -------- ------- ------ ------- ------- -------- ---------ANL 14 614395 923137 -55 0 84.50 1.90 2.86 ------- -------- --------- 87.40 0.65 2.33------- -------- ------- ------ ------- ------- -------- ---------ANL 15 614445 923123 -55 0 99.40 0.60 13.10------- -------- ------- ------ ------- ------- -------- ---------ANL 16 614498 923140 -68 0 88.95 1.00 2.09------- -------- ------- ------ ------- ------- -------- ---------ANL 17 614545 923143 -70 0 57.30 1.40 4.20 ------- -------- --------- 62.70 1.60 10.08------- -------- ------- ------ ------- ------- -------- ---------ANL 18 614595 923143 -60 0 59.70 0.90 9.30------- -------- ------- ------ ------- ------- -------- ---------ANL 19 614644 923139 -60 0 91.50 4.00 17.17 ------- -------- --------- 147.70 0.55 7.26------- -------- ------- ------ ------- ------- -------- ---------ANL 20 614692 923139 -60 0 92.50 1.50 7.39 ------- -------- --------- 104.60 0.30 24.30------- -------- ------- ------ ------- ------- -------- --------- Notes: (i) McPhar Geoservices Inc. assays are quoted where available/ (ii) (*)denotes Philsaga assays The Hope Vein longitudinal projection exploratory diamond drilling has achievedpotentially economic intersections over a strike length of 300 metres to date,which is still open east and west and at depth. Further infill drilling is inprogress prior to a decision to commence underground exploration. The Loring Vein has been tested by underground sampling of old workings and bysix drill holes with good grades being returned from the underground samplingand from drill hole ANL009. Whilst other drill holes have returned lower grades,owing to to the pinch and swell nature of the veins, underground exploration hascommenced through the refurbished Loring Shaft, previously dug by localprospectors, which provides quick and cheap access to the vein for exploratorypurposes. To date underground sampling has established 40 metres of strikelength of mineralised vein averaging 6.87 g/t gold over an average width of 0.90metres. The exploration programme is continuing. OTHER PROJECTS • Abacus Project The Mines Operating Agreement ("MOA") with Abacus Consolidated Resources andHoldings Inc. covers Exploration Permit ("EP") application number 000028-XIIIsituated to the north of the Co-O mine and millsite. The granting process for the Abacus EP is now being pursued. • Das-Agan Project The MOA covering MPSA application number 039-XIII comprising two parcels andsituated to the north and east of the Co-O Mine and millsite. The grantingprocess for the Das-Agan MPSA is now being pursued as a high priority tofacilitate drilling of the Lingig porphyry later in the year. The Lingig porphyry discovery was tested by one drill hole only in 1974returning 150 metres containing 0.4% copper with the hole ending in high gradecopper mineralisation with accessory gold. • Saugon Project The Saugon Exploration Permit has been renewed and an exploration review is inprogress. • Panaon Project The Company has terminated the joint venture with Goldsearch Limited and due tothe Company's commitments at the Co-O Project, the Panaon Project has beenreturned to the claim owners. • Bunawan Project (Magnum Gold NL earning 50%) No field work was conducted during the quarter. CORPORATE • On 27 June 2007, the Company announced that Gallagher Holdings Limited had become a cornerstone investor in Medusa via the placement of 17,500,000 fully paid shares at A$1.15 per share to raise A$20,125,000 before costs. A total of 7,000,000 unlisted options exercisable within 18 months at a price of A$1.60 will also be issued to the investor subject to shareholder approval at a meeting to be held on 7 August 2007. The funding is being used for early payment of vendor finance resulting fromcompletion of the Philsaga acquisition in December 2006, and will be used fordrilling the Lingig porphyry copper discovery later in the year, as well asexpanding exploration in the Barobo Corridor and at other prospects. • As part of the Company's ongoing corporate rationalisation in the Philippines, the Company completed the acquisition of a 1.32% uncapped gross royalty over the Co-O Mine and surrounding areas for A$1,120,000. The information in the above announcement was compiled by Geoff Davis, who hassufficient experience which is relevant to the style of mineralisation and typeof deposit under consideration and to the activity which he is undertaking toqualify as a Competent Person as defined in the 2004 Edition of the"Australasian Code for Reporting of Exploration Results, Mineral Resources andOre Reserves". Geoff Davis consents to the inclusion in the report of thematters based on his information in the form and context in which it appears. For further information, please contact: Medusa Mining Limited + 61 8 9367 0601Geoffrey Davis, Managing DirectorRoy Daniel, Finance Directorwww.medusamining.com.au Ambrian Partners + 44 (0)20 7776 6417Richard Brown / Richard Greenfield Bankside Consultants + 44 (0)20 7367 8888Michael Padley / Louise Davis Note to editors: Medusa Mining is an ASX and AIM-listed gold producer, focused on thePhilippines. The Company controls over 700km(2) of tenements over a 70km strikelength of the richly endowed East Mindanao ridge. Production, which will besourced from a number of operating mines within trucking distance of the centralplant, is currently heading for 40,000ozs per annum and is planned to increaseto approximately 100,000ozs in late 2007 - early 2008. The main producer will bethe Co-O Mine, which has returned grades as high as 29 g/t Au. Additional orewill be sourced in the near term from the Tambis Banaghilig and Anoling Mines,followed by the development of the Sinug-ang Mine area in mid 2007. COMPANY PROFILE: • High grade mining inventory (195,000ozs @ 17.6 g/t gold) at Co-O Gold Mine set to increase; • New resource/reserve estimations expected by early September 2007; • Centrally located mill, multiple mines; • Initial production target of 40,000 ounces per annum; • Expanding production profile; • Estimated long term cash costs of approximately US$200 per ounce; • Extensive exploration area of >700 km(2), along 70 km strike of the richly endowed East Mindanao ridge; • Regional assessment confirms excellent prospectivity for gold and porphyry copper-gold deposits. Share capital as at 30 June 2007: Shares: 142,037,548 (ASX/AiM code :MML)Unlisted options: 6,821,446 Listings Australian Stock ExchangeAlternative Investment Market (London)Frankfurt Stock Exchange This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
MML.L