Information  X 
Enter a valid email address

Medusa Mining Ltd (MML)

  Print      Mail a friend       Annual reports

Tuesday 30 October, 2012

Medusa Mining Ltd

Quarterly Activities Report

RNS Number : 7873P
Medusa Mining Limited
30 October 2012
 



Medusa Mining Limited

("Medusa" or the "Company")

 

QUARTERLY ACTIVITIES REPORT

PERIOD ENDED

30 SEPTEMBER 2012

 

Snapshot of Medusa:

 

·    Un-hedged, low cost, dividend paying gold producer focused on organic growth in the Philippines

·     Growth path to annualised production of 400,000 ozs per year by end 2015

·     Growth underpinned by strong cashflow from Co-O Mine (narrow vein underground)

·     FY 2012/13: production guidance of 100-120,000 ozs at cash costs circa US$210/oz

·     Current Mineral Resources comprise

-     Co-O Mine: Indicated 715k ozs at 11.8 g/t gold; Inferred  1,304k ozs at 9.4 g/t gold

-     Bananghilig: Inferred 1,100k ozs at 1.63 g/t gold

·     Current Probable Reserves : Co-O Mine 568k ozs @ 9.7 g/t gold

·     Co-O Mine Resources and Reserves to be maintained at current levels

·     Conceptual exploration target size ** of Co-O Mine of 3 to 7 million ozs

·     Excellent exploration upside: high grade vein and disseminated bulk gold targets, plus eight  copper targets

·     820 km2 of tenements and exploration revised budget for FY 2012/13 of US$30M

 

** The potential target size and grade is conceptual in nature, and there has been insufficient exploration to define a mineral resource, and it is uncertain if further exploration will result in the target being defined as a mineral resource. Refer to Stock Exchange announcement dated 24 August 2011.

 

Board of Directors:

 

Geoffrey Davis (Non-executive Chairman)

Peter Hepburn-Brown (Managing Director)

Ciceron Angeles (Non-executive Director)

Robert Weinberg (Non-executive Director)

Andrew Teo (Non-executive Director)

 

Capital Structure:

 

Ordinary shares: 

188,903,911

Unlisted options:         

1,715,000

Performance rights:

250,000

 

Listings:

ASX and LSE (Code: MML)

 

Address and Contact Details:

PO Box 860

Canning Bridge  WA  6153   

Telephone  : +618 9367 0601

Facsimile    : +618 9367 0602

Email          : [email protected]

Website      : www.medusamining.com.au

 

PROJECT OVERVIEW

 

The locations of the Company's projects are shown on Figures 1 and 2 (please see the link at the end of this announcement).

 

EXECUTIVE ORDER ON MINING IN THE PHILIPPINES

 

The President of the Philippines on 9 July 2012 released Executive Order No.79 ("EO") designed to improve the alignment of the Philippines' national and regional interests with those of the mining industry through the updating of key policies.

 

On 4 October 2012 the EO (as described in the 30 June 2012 quarterly report) was signed by the President. However the future royalty rates have still not been finalised.

 

Co-O MINE

 

Gold Production

 

The production statistics for the September 2012 quarter with comparatives for the previous four quarters are summarised in Table I below.

 

Table I. Gold production statistics

 


Unit

Qtr ended                  30 Sep 2012

Qtr ended                  30 Jun 2012

Qtr ended                  31 Mar 2012

Qtr ended                  31 Dec 2011

Qtr ended 30 Sep 2011

Tonnes mined

WMT

70,591

74,969

85,748

71,872

41,596

Ore milled

DMT

66,809

66,976

76,002

68,008

42,152

Recovered grade

gpt

7.50

8.10

8.10

8.00

8.33

Recovery

%

90%

92%

92%

93%

93%

Gold produced

ozs

14,403

15,557

18,258

16,270

10,510

Cash costs (1)

US$/oz

$328

$283

$239

$242

$291

Gold sold

ozs

25,000

20,000

10,000

10,000

15,446

Average gold price received

US$

$1,636

$1,624

$1,738

$1,761

$1,587

 

Note:

 

(1) Net of development costs and includes royalties and local business taxes

 

Gold production for the quarter was 14,403 ounces, at an average recovered grade of 7.50 g/t gold and cash costs of US$328 per ounce, inclusive of royalties and local business taxes.

As has been the case for the four previous quarters, the mine continues to operate pre-dominantly in development mode to prepare for the future production increase and all development ore mined to date has been treated through the mill. In addition to the heavy emphasis on development, the mine's production has also been hampered by shaft haulage access. The completion of the Saga Shaft (in the December 2012 quarter) with additional haulage capacity of 1,500 tpd will solve the current shaft haulage issues.

 

Production for the quarter was also hampered by a fire in mid-August which caused extensive damage to the Baguio Shaft, temporarily putting it out of service for approximately two months. The remedial expenses to refurbish and recommission the Baguio Shaft have had an adverse impact on the September quarter's cash costs which increased to US$328 per ounce (June 2012 Qtr: US$283 per ounce). These once off costs relating to the refurbishment and recommissioning of the Baguio Shaft and balance of expenses relating to leach tank repairs, completed in late July 2012, amounts to approximately US$35 per ounce of this quarter's cash costs.

 

Medusa, an un-hedged gold producer, sold 25,000 ounces of gold at an average price of US$1,636 per ounce during the quarter.

 

Preliminary Development Timetable

 

Graph 1 (please see the link at the end of this announcement) is the Preliminary Development Timetable and Production Guidance for the new Co-O Phase 3 Mill Expansion and Bananghilig Project.

 

The total estimated Capex (inclusive of mine development and shaft sinking) for the Phase 3 expansion of Co-O is US$70 million which will be funded entirely from the Company's cash flow.

 

New Co-O Mill

 

In November 2010, the Board approved the construction of a new mill with capacity to produce 200,000 ounces of gold per year based on processing up to 750,000 tonnes per year at the current reserve grade of the Co-O Mine.

 

The approval to upgrade the Environmental Clearance Certificate for the current Co-O Mill to 2,500 tonnes per day was granted on 9 October 2012.

 

Operations

 

Mine Development

 

Major renovations are continuing at the Co-O Mine to modernise the mine for its expanded production.

 

The Saga Shaft reached its planned depth of 350 metres in the first week of September. The plat at Level 8 has been cut.  The loading chute is being installed and additional space for workshops and other facilities is being excavated. Haulage capacity is limited until the newly delivered winder is operational. Manufacture of the permanent headframe is well advanced.

 

The Saga Shaft with a haulage capacity of 1,500 tonnes per day is planned to be completed at the end of December quarter 2012 and hauling of significant amounts of ore from Level 8 will begin once Level 8 on-vein development advances and rises on-vein are commenced from Level 8 through to Level 6 (100 metres vertical distance).

 

At the Baguio Shaft, the top 120 metres of timber were burnt out by the fire as reported on 22 August 2012. The shaft was returned to service in the first week of October ahead of schedule after its capacity was upgraded a second time to 350 tonnes per day (from 250 tonnes per day).

 

Accelerated lateral development is on-going to ensure the underground infrastructure and on-vein development will be in place for the Saga Shaft. This accelerated development was maintained at similar levels to the previous quarter and consequently maintained the high proportion of development ore supplied to the mill.

 

The average development was 970 metres and at the end of September 2012 there were 50 development headings on-vein and 5 on waste. Haulage was affected by the Baguio Shaft fire during the quarter.

 

Mine Production

 

Ore trucked to the mill during the quarter was primarily development ore and some stope ore.

 

Mill Expansion

 

The current status of activities is:

·   Construction of the new large leach tank has been completed and it is in operation;

·   Foundations for the new crusher completed;

·   SAG mill foundations advancing, SAG mill now completely delivered on schedule (Photos 1 & 2);

·   The de-toxification unit foundations are completed and steel work commenced;

 

The electrical supply systems to the mine and mill are advancing. Re-wiring of the Co-O Mine through the Saga Shaft has commenced.

 

Please see the link a the end of this announcement for Photos 1 and 2, showing the SAG mill 45 tonne end plate being transported 210 kilometres from Davao port to Co-O mill site and both end plates of the SAG mill on site.

 

Resource Estimate

 

On 6 August 2012 a new resource estimate for the Co-O Mine was announced as below:

Table II. Co-O Mine Mineral Resource estimate at 30 June 2012.

 

Category

> 3 g/t gold

tonnes

g/t gold

ounces

Indicated resources

1,890,000

11.8

715,000

Inferred resources

4,325,000

9.4

1,304,000

TOTAL RESOURCES

6,215,000

10.1

2,019,000

 

Notes:

- A lower cut-off of 3 g/t gold has been applied

- Variable upper cuts up to 300 g/t gold have been applied to different veins

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

 

Additional detailed information is contained in the announcement dated 6 August 2012. The resource estimate was undertaken by Cube Consulting Pty Ltd of Perth Western Australia.

 

Reserve Estimate

 

As announced on 24 August 2012, the Probable Reserve at 30 June 2012 now stands at 568,000 ounces contained in 1,820,000 tonnes at 9.7 g/t gold.

 

Additional detailed information is contained in the announcement dated 24 August 2012. Carras Mining Pty Ltd of Perth, Western Australia undertook the reserve estimation based on the resource wireframe model provided by Cube Consulting Pty Ltd. 

 

Exploration

 

Drilling with six surface rigs and three underground drilling rigs is continuing.

 

Preparations are underway for an extensive regional Induced Polarisation/Resistivity ("IP/Res") and ground magnetics programme around the Co-O Mine which is likely to be commenced in early 2013.

 

Please see the link at the end of this announcement for Figure 3 (please see link at the end of the announcement), Co-O Mine area interpreted geological map

 

Co-O Geology and Mineralisation

 

New detailed discussions and interpretations of the Co-O Mine geology and mineralisation were announced on 14 August 2012 and are also contained in the 2012 Annual Report. These interpretations are summarised below:

 

·       The Co-O Mine area is underlain gently north-dipping basaltic andesitic to andesitic volcanic flows and minor volcaniclastics (Fig. 3 (please see link at the end of the announcement)) which have been intruded by andesitic to dioritic stocks and cut by north-trending faults.

·       There are three large outcropping intrusives, namely the Nangka, Road 17 and Pinayungan Intrusives, located east and southwest of the Co-O vein system, and several smaller ones in the vicinity. The Nangka and Pinayungan Stocks are in place while the rest are "floating" in the Co-O Diatreme including the large Road 17 Mega Block.

·       Porphyry-related copper-gold mineralization is hosted only in the Nangka Stock and the surrounding volcanics (Figs 4 to 6 (please see link at the end of this announcement)). Generally grades range from 0.11 to a maximum of 0.31 % Cu and 0.11 to 0.24 g/t Au with a Cu:Au ratio of about 1:1 to 1:2. This is not primary porphyry mineralisation.

·       After a period of substantial uplift and erosion, a diatreme/maar complex explosively intruded all the above rock types (Figs. 4 to 6 (please see link at the end of this announcement)). Its presence explains the general absence of near surface epithermal veins east of the Oriental Fault instead of invoking a large down thrown movement of the zone as the veins are masked by the flare of the diatreme.

·       The Co-O Diatreme is upward flaring in all directions towards the surface, measuring about 1.5 kilometres in diameter, and narrows down at depth like a funnel of unknown dimensions. Its root is probably located at the southern part of the Road 17 Intrusive. It is inferred that the diatreme may easily reach 1 kilometre or more in depth as indicated by its surface dimension wherein the vertical extent is more than its lateral extent. The maar volcanics, which are the extrusive equivalent of the diatreme and deposited by the explosive activity of the diatreme.

·      After the emplacement of the diatreme/maar complex, mineralised hydrothermal breccias followed by epithermal gold veins were formed, overprinting the older porphyry-related copper-gold mineralisation. The veins generally strike west-northwest to due west and dip 55 to 75° to the north for all veins except the Central Vein which is vertically dipping.

 

After another episode of uplift and erosion, a thin veneer of polymictic conglomerate to a maximum thickness of about 30 metres, was deposited on top of the diatreme/maar complex (Fig. 3 (please see link at the end of this announcement)).

 

OVERVIEW:

 

EXECUTIVE ORDER ON MINING IN THE PHILIPPINES

 

§ Positive Executive Order No.79 on mining in the Philippines was released on 9 July 2012 and signed on 4 October 2012. Changes to royalty rates not yet set.

 

Co-O MINE PRODUCTION & DEVELOPMENT

 

§ New Mill: ECC granted. Construction on schedule. New leach tank and foundations for crusher completed, and SAG mill foundations advancing. SAG mill now delivered.

§ Production: 14,403 ounces at a recovered grade of 7.5 g/t gold and cash costs of US$328 per ounce.

§ Saga & Baguio Shafts: Saga reached depth of 350 metres in early September. Plat cut, loading chute being installed. Winder arrived. Completion estimated late December. Baguio Shaft recommissioned ahead of schedule.

 

Co-O MINE RESOURCES, RESERVES, EXPLORATION

 

§ The new Inferred and Indicated Resources total is 2,019,000 ounces at 10.1 g/t gold in 6,215,000 tonnes.

§ The new Probable Reserve is 568,000 ounces at 9.7 g/t gold in 1,820,000 tonnes.

§ Drilling is continuing with six surface and three underground rigs.

 

TAMBIS AREA - BANANGHILIG DEPOSIT

 

§ New Inferred Resource of 1,100,000 ounces at 1.63 g/t gold in 21,000,000 tonnes.

§ Infill drilling has been completed with rigs reduced from 6 to 2 for sterilisation drilling. An Indicated Resource estimate is planned during the next quarter.

 

LINGIG PROJECT

 

§ Lingig Induced Polarisation and Resistivity survey nearing completion.

 

ANOLING

 

§ Drilling has been suspended while results are assessed.

 

CORPORATE & FINANCIALS (unaudited)

 

Total cash, cash equivalent in gold on metal account and bullion at site at end of quarter of approximately US$37.7 million.

 

Implications

 

On the eastern side of the Oriental Fault, now that the diatreme breccia pipe has been defined, the outcropping of northern veins such as the Royal Vein set and the non-outcrop of others is readily explained as the outcropping ones are not masked by the diatreme complex. Some of the non-outcropping veins are hidden below the flare of the diatreme and below Maar volcanics.

 

This new interpretation also negates the need to invoke a substantial vertical displacement on the Oriental Fault. The consequence is that there is now no geological reason why the vein system on the west side of the Oriental Fault should not continue to similar depths to those found on the eastern side of the fault.

 

Health and Safety

 

Lost time accident frequency rate (LTAFR) for the three months to 30 September 2012 is 0.97 including exploration. By comparison, the latest West Australian gold mining industry figure available to 30 September 2011 was 3.10, excluding exploration statistics of 6.70.

 

There were no breaches of any of the project's operating regulations during the quarter.

 

TAMBIS REGION

 

The Tambis project comprising the Bananghilig Gold Deposit (Fig. 2 (please see link at the end of the announcement)) is operated under a Mining Agreement with Philex Gold Philippines Inc. over Mineral Production Sharing Agreement ("MPSA") 344-2010-XIII which covers 6,262 hectares.

 

The Executive Order on Mining dated 6 July 2012, issued by the President of Philippines will have no immediate impact on the Bananghilig Project as the Company can continue to explore, conduct feasibility studies and planning.

 

However, should the feasibility study be positive and the Company commits to constructing the project, timely issuance of the relevant permits to commence construction will be subject to legislation of the new law on mining taxes and royalties to be passed by Congress.

 

Updates will be provided as material information becomes available.

 

BANANGHILIG PROJECT

 

In July 2010, new regional and detailed mapping and drilling programmes were commenced with the aim of validating the current resource of 650,000 ounces of gold and extending it to provide a reserve of approximately 1,000,000 ounces. This reserve would form the basis for a feasibility study which would target production of 200,000 ounces of gold per year from a new milling facility.

 

The announcement of 12 September 2011 summarises the Tambis regional geological setting, local geological setting, deposit description and mineralisation, shows a typical cross-section through the deposit and the drill hole intersections obtained for the period 24 July 2010 to 31 August 2011. Additional information is contained in the September 2011 quarterly report dated 24 October 2011 and in a drilling update on 17 January 2012.

 

Drilling Results

 

A drilling results update was announced on 8 August 2012 (as summarised in Table III) and included in the Inferred Resource estimate which was announced on 28 August of 1,100,000 ounces at 1.63 g/t gold contained in 21,000,000 tonnes. Table IV shows the range of resource estimates and cut-offs.

 

A further update of drilling results and an Indicated Resource estimate are planned for the December quarter 2012.

 

Detailed drilling results are contained in the 8 August 2012 announcement and are summarised in Table III where significant intercepts are defined on the following basis:

 

(i) lower cut-off grade of 0.5 g/t Au, and

(ii) ≥ 5 metres downhole intercept width at ≥ 1.0 g/t Au, and

(iii) maximum of 3 metres of downhole internal dilution at ≤0.5 g/t Au.



Table III. Bananghilig surface drill hole results ≥1g/t gold.

 

Hole number

East

North

Dip  (°)

Azimuth (°)

From (metres)

Width (metres)

Grade (uncut)     (g/t gold)

TDH139†

612887

945049

-60

130

481.35

18.85

10.19






578.35

22.25

2.43

TDH143

612749

945658

-60

130

20.80

5.80

6.32






38.50

6.50

1.09

TDH148

612833

945612

-60

130

2.00

6.10

1.12






21.30

7.45

2.23

TDH149

613016

945224

-60

130

95.05

9.95

1.51






214.25

6.25

1.46






235.40

9.50

1.43






292.10

7.05

1.95

TDH151

612715

945423

-60

130

63.35

6.85

6.11






197.65

13.20

1.34

TDH154

612672

945539

-70

130

81.60

9.35

1.06

TDH156

613056

945500

-60

130

259.25

12.85

1.24






451.40

6.80

1.03






495.40

5.00

1.30

TDH157

612939

945229

-60

130

64.40

13.55

1.54






85.95

9.45

1.42






154.20

27.50

2.12

TDH161

612834

945040

-60

130

135.20

6.00

2.02

TDH162

612291

944989

-60

130

190.80

5.00

1.33

TDH172

612590

945049

-60

130

59.00

11.90

1.49

TDH173

612496

945386

-70

130

77.00

15.20

1.64






101.60

19.05

1.24






160.90

8.80

5.09

TDH174

612791

945115

-50

130

79.60

11.00

1.49

TDH175

612623

945243

-70

130

104.75

5.00

1.23






266.25

5.45

1.26

TDH176

612534

945308

-60

130

16.50

12.80

1.47






91.10

9.70

1.29






187.05

8.80

1.09

TDH177

612824

945195

-60

130

150.30

7.00

1.29

TDH180

613064.

945194

-60

130

31.95

7.85

3.33






137.10

5.30

1.38

TDH181

613002

945164

-60

130

133.40

5.95

8.69






162.10

8.85

2.71

TDH182

612897

945139

-60

130

97.95

7.00

1.16






125.40

7.00

1.02

TDH185

612617

945371

-60

130

12.30

10.80

2.30






78.75

9.15

9.34






131.00

8.55

1.27

TDH188

612987

945220

-60

130

204.45

15.85

2.98

TDH189

612656

945067

-60

130

79.00

13.95

1.38






97.00

18.40

4.29

TDH190

612897

945182

-60

130

223.60

10.20

2.36

TDH192

612667

945143

-60

130

70.85

7.25

1.55

TDH193

612772

945279

-60

130

141.20

7.00

1.88






164.70

6.15

1.93

TDH195

612811

945291

-60

130

69.75

9.50

1.05

TDH196

612518

945387

-55

130

13.60

13.50

1.25






31.90

5.70

1.37






56.30

6.35

1.15






99.50

7.15

4.26






132.10

5.90

1.15

TDH197

612550

945426

-60

130

1.30

17.05

1.19






131.85

13.00

1.48

 

Hole number

East

North

Dip  (°)

Azimuth (°)

From (metres)

Width (metres)

Grade (uncut)     (g/t gold)

TDH198

612742

945269

-60

130

83.35

12.30

1.07

TDH199

613010

945200

-60

130

167.10

7.50

1.48

TDH200

612630

945014

-60

130

61.80

14.25

8.64

TDH201

612815

945394

-47

130

161.20

7.00

1.78






174.75

16.05

1.05

TDH202

612707

945336

-55

130

158.25

5.20

6.04

TDH203

612434

945691

-47

130

162.10

15.65

1.09

TDH204

612567

945472

-70

130

21.15

10.45

6.72

TDH207

612973

945192

-60

130

199.35

5.75

1.50

TDH208

612751

945110

-60

130

116.86

13.65

1.00

TDH210

612409

945392

-60

130

29.65

6.05

1.13






38.70

5.00

1.74

TDH212

612656

945098

-60

130

171.45

5.00

1.32

TDH213

612645

945168

-60

130

38.70

8.00

1.32

TDH214

612693

945427

-70

130

123.35

11.95

1.03

TDH215

612592

945069

-60

130

91.90

10.10

13.43

TDH216

612724

945016

-60

130

201.10

11.15

1.08

TDH217

612530

945676

-60

130

2.40

16.90

1.07






94.55

6.60

1.93

TDH218

612692

945013

-60

130

101.75

11.45

3.19

TDH219

613017

945269

-60

130

40.60

5.00

1.11

TDH222

612563

945047

-60

130

78.65

17.20

3.27

TDH225

612941

945303

-60

130

2.60

5.10

1.05

TDH227

612744

944950

-60

130

133.50

5.00

1.59

TDH230

612654

945663

-60

130

49.40

5.35

3.84

TDH240

612452

945362

-60

130

55.20

6.50

2.08






117.50

14.05

1.41






232.60

27.20

2.91

TDH241

612517

944962

-60

130

47.45

10.25

2.00

TDH246

612708

945496

-47

130

106.60

6.65

2.19






185.15

11.45

1.07






202.05

13.55

10.76

 

Notes:

 

(i)    Intersection widths are downhole drill widths not true widths;

(ii)   Assays are by Intertek McPhar Mineral Services Inc. in Manila;

(iii)   Grid coordinates based on the Philippine Reference System 92.

 

Resource estimation

A global Inferred Resource estimation for Bananghilig was undertaken by Cube Consulting Pty Ltd of West Perth, Western Australia. The estimation was based on historical drilling and new drill hole data since July 2010.

 

Table IV. Inferred Resource estimate as at 31 July 2012

 

Cut-off (g/t gold)

tonnes

g/t gold

ounces

0.5

44,200,000

1.10

1,500,000

0.6

33,400,000

1.28

1,300,000

0.7

26,100,000

1.46

1,200,000

0.8

21,000,000

1.63

1,100,000

0.9

17,300,000

1.80

1,000,000

1.0

14,800,000

1.94

900,000

 

Note: Tonnes and ounces rounded down to nearest 100,000

 

Additional detailed information is available in the announcement dated 28 August 2012.

 

DRILL HOLE SAMPLING AND ASSAYING PROCEDURES

           

Drilling Procedures

 

Drilling, sampling and analytical methodologies are of internationally acceptable standards. Drilling and analyses are carried out by independent contractors, SBF Philippines Drilling Resources Corp. ("SBF") and Intertek McPhar Mineral Services Inc. ("Intertek") respectively.

 

Drilling is carried out by SBF using wireline diamond coring techniques, with the core being predominantly HQ triple-tube (HQ3) diameter (OD 61 mm). The holes are initially collared using PQ drillbits (OD 123 mm) to recover PQ3 core (OD 83 mm) until the drillbit encounters competent ground, then the coring bit is reduced to HQ3 for the remainder of the drill hole.  If difficult conditions are encountered, then the drill bit is changed to NQ3 (core OD 45 mm) and the hole continued until the planned depth or bad ground conditions prevent further drilling, whichever occurs first. Core recovery is generally better than 95% and is considered to be good.

 

Drill Core Sampling

 

Drill core is recovered from the inner tube and handled carefully to preserve the integrity of the drill core.  Structural measurements are taken including Rock Quality Determinations ("RQD") and Fracture Densities. The core is then placed in plastic core trays, aligned, photographed and marked up for sampling.

 

The drill core is then cut in half by diamond core saw and sampled at one metre intervals or at lithological boundaries. The samples are placed in individually labelled plastic sample bags, a sample number ticket included, and then sealed for despatch to Intertek's Sample Preparation laboratory in Surigao City. The integrity of the core samples is supervised at all times by the geologists until despatch to the laboratory where they are accompanied by company personnel until receipt by Intertek.

 

One Certified Reference Material ("CRM"), one Blank and if possible, one Duplicate is included within each successive group of twenty samples that are submitted to the laboratory. QA/QC monitoring of the drilling program and the results is ongoing.

 

Analytical Procedure

 

Sample preparation is undertaken by Intertek at their Surigao City laboratory, where each sample is registered, dried at 105ºC for 6 to 8 hours and crushed to 95% passing 2 mm by jaw crusher, before a 1kg split is taken for fine pulverising, using a riffle splitter or rotary sample divider.  Pulverised sample is nominally pulverised to 95% passing 75μm (200 mesh).

 

Quality control procedures include a 1 in 15 resplit after crushing for partial preparation and after pulverising for total preparation. These resplits are also analysed and included in the analysis report.  Sizing tests are carried out on 1 in 20 assay pulps at 75μm (200 mesh) to monitor the pulverising stage. Four 250 gram splits are obtained, one for sample analyses and the remaining three for storage for future reference.

 

Standard laboratory procedure is to clean the crusher and pulveriser after each sample treatment with barren material and/or bowl wash, to minimise carry-over contamination.

 

Pulverised samples are analysed by classical fire assay techniques on a 50 gram charge with Atomic Absorption Spectrometer ("AAS") finish. All assays over 5 g/t gold and other selected samples are re-assayed using gravimetric fire assay techniques on a 50 gram sample.

 

USA PORPHYRY COPPER-GOLD PROSPECT

 

A Memorandum of Agreement with Corplex Resources Inc. covers the Usa prospect which is located within MPSA application XIII-00077. Processing of the tenement application is progressing.

 

LINGIG

 

The Lingig prospect is located in Mineral Production Sharing Agreement 343-2010-XIII with an area of 3,824 hectares over which the Company has an operating agreement.

 

The IP/Res and ground magnetics survey is nearing completion.

 

ANOLING

 

The Mines Operating Agreement with Alcorn Gold Resources Inc. covers MPSA application 039-XIII situated approximately 8 kilometres by road to the north of the millsite as shown on Figure 2 (please see link at the end of the announcement).

 

As outlined in the June quarterly report, drilling priorities have been reviewed and drilling has now been suspended at Anoling to allow an assessment of the results to be undertaken.

 

SAUGON PROJECT

 

First Hit Vein 

 

Background

 

Figure 2 (please see link at the end of the announcement) shows the Saugon Project located approximately 28 kilometres by road from the Co-O Mill. Work in 2004 involved drilling at the First Hit Vein (holes SDDH-001 to SDDH-035) in conjunction with underground development via a 30 metre deep inclined winze down the vein-breccia to assist in understanding the mineralisation.

Further details are contained in the announcements dated 20 April 2010 which summarised the historical results and 1 December 2010 which contained drilling results for holes SDDH-36 to SDDH-64A and the March 2012 quarterly report contained results for holes SDDH 65-104.

 

Exploration

 

Regional mapping, trenching and sampling are continuing.

 

FINANCIALS (unaudited)

 

As at 30 September 2012, the Company which is debt free, had total cash, cash equivalent in gold on metal account and bullion at site of approximately US$37.7 million (30 June 2012: US$53.5 million).

 

During the September 2012 quarter,

 

·   the Company sold 25,000 ounces of gold at an average price of US$1,636 per ounce (June 2012 qtr: sold 20,000 ounces at an average price of US$1,624 per ounce);

·   incurred exploration expenditure of US$8.5 million (June 2012 qtr: US$11.6 million);

·   spent US$6.5 million on capital works, associated sustaining capital at the mine and mill and also costs for the new mill construction and infrastructure (June 2012 qtr: US$10.4 million);  and

·   spent US$7.4 million on general and accelerated mine development, inclusive of shaft sinking costs (June 2012 qtr: US$7.4 million).

 

CORPORATE

 

A final unfranked dividend of A$0.02 per share was paid to shareholders on 4 October 2012.

There was no foreign conduit income attributed to the dividend, and the total amount paid, inclusive of associated costs was approximately A$3.8 million.

 

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

 

"Major advances have been made during the quarter as we consolidate our expansion activities.

 

  The Saga Shaft reached depth on schedule and is now being set up at Level 8 for commissioning in late December. Equipping the shaft and installation of the winder is now progressing, as well as the new electrical systems.

 

Good progress has been made at the mill with the completion of the foundations for the crusher and the detoxification unit, completion of the large leach tank, and commencement of the SAG mill foundations. The SAG mill has now also been delivered on schedule.

 

The fire at the Baguio Shaft has allowed us to upgrade it a second time to 350 tonnes per day capacity. The shaft was re-commisioned in the first week of October well ahead of our initial estimate

 

Cash costs for the quarter have increased as a result of the one off costs associated with the refurbishment and recommissioning of the Baguio Shaft and also the balance of the expenses associated with the leach tank repairs that were completed in late July 2012."

 

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 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.

 

To view Figures and Preliminary Development Timetable, please click on or paste the following link in your browser:

 

http://www.rns-pdf.londonstockexchange.com/rns/7873P_-2012-10-29.pdf 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
MSCLLFFRIRLAFIF

a d v e r t i s e m e n t