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Medusa Mining Ltd (MML)

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Thursday 08 August, 2013

Medusa Mining Ltd

Mineral Reserve & Resource Update

RNS Number : 2421L
Medusa Mining Limited
08 August 2013
 



MEDUSA MINING LIMITED

ABN: 60 099 377 849

Unit 7, 11 Preston Street

Como  WA  6152

  PO Box 860

Canning Bridge  WA  6153   

Telephone:  +618-9367 0601   

Facsimile:  +618-9367 0602

Email:  [email protected]

Internet: www.medusamining.com.au

 

08 August 2013

 

MINERAL RESERVE & RESOURCE UPDATE

 (ASX & LSE: MML)

Medusa Mining Limited ("Medusa" or the "Company"), through its Philippines operating company, Philsaga Mining Corporation ("Philsaga"), advises that it has completed the annual reserve and resource estimate update.

Co-O MINE

Resources

In line with the mine expansion, the FY 2013 drilling has focused on infill drilling to increase confidence levels in key mining areas as well as step out drilling along strike and at depth to demonstrate the excellent upside of the deposit. The deposit is still open in all directions continuing to demonstrate excellent potential to add more resources in future years. 

A 3 g/t gold lower cut-off has been applied to the resource, resulting in total combined Indicated and Inferred Mineral Resources of 6,880,000 tonnes containing 2,195,000 ounces at a grade of 9.9 g/t gold (compared to 2,019,000 ounces at 10.1 g/t gold in FY2012 and after taking into account gold produced of 62,243 ounces since 01 July 2012). The Indicated Mineral Resource ounces have increased by 14% to 820,000 ounces at 12.1 g/t gold (from 715,000 ounces at 11.8 g/t gold).

Reserves

The Probable Ore Reserve ounces have been maintained at 570,000 ounces (compared to 568,000 ounces) at 10.7 g/t gold in 1,650,000 tonnes after allowing for mining depletion.

BANANGHILIG GOLD DEPOSIT

Indicated & Inferred Mineral Resource Estimation

A 0.8 g/t gold lower cut-off has been applied to the resource estimate, resulting in total combined Indicated and Inferred Resources of 24,520,000 tonnes containing 1,136,000 ounces at a grade of 1.44 g/t gold (compared to 1,080,000 ounces in 20,900,000 tonnes at 1.60 g/t gold as reported on 29th January 2013). The Indicated Resource ounces have increased by 26% to 766,000 ounces at 1.48 g/t gold (from 608,000 ounces at 1.59 g/t gold).

 

Table I. Mineral Reserve and Resource estimate at 30 June 2013 (using JORC 2004)

 

Deposit

Category

Tonnes

Grade

g/t gold

Ounces

gold

RESOURCES





Co-O Resources

Indicated

2,100,000

12.1

820,000


Inferred

4,780,000

9.0

1,375,000

Total Co-O Resources

Indicated & Inferred

6,880,000

9.9

2,195,000

Bananghilig Resources

Indicated

16,060,000

1.48

766,000

Inferred

8,460,000

1.36

370,000

Total Bananghilig Resources

Indicated & Inferred

24,520,000

1.44

1,136,000

Saugon Resources

Indicated

              47,500

     6.99

10,700

Inferred

              34,000

     4.55

5,000

Total Saugon Resources

Indicated & Inferred

81,500

5.97

15,700

TOTAL RESOURCES

Indicated & Inferred

31,481,500

3.31

3,346,700

Total Indicated Resources


18,207,500

2.73

1,596,700

Total Inferred Resources


13,274,000

4.10

1,750,000

RESERVES





Co-O Reserves

Probable

1,650,000

10.7

570,000

 

Notes: (Resources includes Reserves)

Resources:

- a lower cut-off of 3.0 g/t gold has been applied at Co-O

- various upper cut-off gold grades up to 300 g/t gold have been applied to different veins at Co-O

- a lower cut-off of 0.8 g/t gold has been applied at Bananghilig and various upper cuts

- a lower cut-off of 2.0 g/t gold has been applied at Saugon

- rounding to the nearest 1,000 may result in some slight discrepancies in totals

Reserves:

- Reserves are a subset of Resources

- a cut-off grade of 4.0 g/t gold has been applied to developed ore

- a cut-off grade of 4.7 g/t gold has been applied to un-developed ore

- a gold price of US$1,200 has been applied

Co-O MINERAL RESOURCE MODEL

Discussion

Compared to the previous reserve estimate at 30 June 2012, the reserve grade has increased marginally mainly due to:

·   the increase in Indicated Resource grade from 11.80 g/t gold (as at 30 June 2012) to 12.1 g/t gold (as at 30 June 2013), and 

·   new veins added to the reserve estimate.

Vein modelling

Cube Consulting Pty Ltd of Perth, Western Australia, was contracted to undertake the resource estimate.  A wireframe model of the vein system and the mine depletions were based on all available information as at 30 June 2013.  A Specific Gravity value of 2.62 was used in the estimations. A 2D longitudinal modelling approach was used and is based on an accumulation variable incorporating mineralised vein horizontal width and intercept grade.  Variography was used to analyse the spatial continuity of the horizontal width and accumulation variables within the mineralised veins and to determine appropriate estimation inputs to the interpolation process. The accumulation variables were interpolated into blocks using Ordinary Kriging.  High grade limits were applied to gold prior to the calculation of the accumulation variable.

The Co-O Mineral Resources have been reported in accordance with The 2004 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code).

BANANGHILIG MINERAL RESOURCE MODEL

Resources

Compared to the information available at the time of the previous resource estimate at 30 June 2012, the total resource ounces have increased marginally to 1,136,000 ounces. Infill drilling has increased the Indicated Resource category ounces by 26%.

Resource modelling

Cube Consulting Pty Ltd of Perth, Western Australia, was contracted to undertake the resource estimate. The Bananghilig Mineral Resource estimate is based on a number of factors and assumptions, some of which are listed below:

•    all available drilling data as at 30 June 2013 was used for the Mineral Resource estimate;

•    wireframes were generated on plan and cross sectional interpretations based on available geology and assay data available. A lower cut off of approximately 0.3 g/t Au was used to define a single mineralised domain;

•    all wireframes were corrected for artisanal miners' depletion;

•    upper cut of40 g/t was applied to the 2 metre composites prior to grade estimation;

•    the bulk densities used range from 1.8 to 2.76 t/m3 depending on the modelled lithology. A total of 4,000 bulk density measurements have been completed;

•    the Resource has been estimated using Ordinary Block Kriging and Uniform Conditioning (UC).  UC is a mathematical method that allows the discrimination of ore and waste at an assumed selective mining unit size within an estimated panel of significantly larger size.  In theory, this provides a more correct prediction of estimated resource grade and tonnes above a cut off than an Ordinary block Kriging alone. The method draws information from the composite data variogram model and Krige's Relationship; and

•    the application of the (UC) technique at Bananghilig is based on the premise that mining would be by open pit extraction.  A Selective Mining Unit ("SMU") of 5 metres by 5 metres by 2 metres was evaluated within Ordinary Kriged panels Y = 25 metres; X = 25 metres and Z = 5 metres for the purposes of reporting recoverable resources. 

The Bananghilig Mineral Resources have been reported in accordance with The 2004 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code).

 

Peter Hepburn-Brown, Managing Director of Medusa, commented:

"The increase in total Indicated Resources is pleasing as confidence levels have been significantly improved in key areas of the Co-O Mine and at Bananghilig. The step-out drilling at both the Co-O Mine and Bananghilig strongly supports future resource additions as both mineralised systems remain open in all directions including at depth.

Drilling is planned to continue at the B2 area contiguous with the Bananghilig Deposit with 2 surface rigs and underground at Co-O Mine with 4 underground rigs during FY 2014."

 

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 their 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 Geoscientists 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.

 

 


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