Medusa Mining Limited
TSX : MLL
ASX : MML
AIM : MML

Medusa Mining Limited

April 20, 2010 00:56 ET

Medusa Mining Limited: Saugon Drilling Commencing

COMO, WESTERN AUSTRALIA--(Marketwire - April 20, 2010) - Medusa Mining Limited (TSX:MLL)(ASX:MML)(AIM:MML) ("Medusa" or the "Company") through its Philippines operating company Philsaga Mining Corporation ("Philsaga"), advises that drilling will commence during May at the Saugon First Hit Vein Prospect. This project was last drilled by the Company in 2004. Selected previous intersections are listed below:



Highlights include:
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Hole Number Intercepts (metres) Grade (g/t gold)
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SDDH 2B 1.00 35.75
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SDDH 27 1.00 16.30
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5.95 9.63
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SDDH 28 2.05 20.54
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SDDH 29 0.90 15.32
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Geoff Davis, Managing Director of Medusa, commented:

"Drilling in 2004 reported some tantalising results at Saugon. The high grade gold mineralisation is poly-metallic with some high silver and copper-lead-zinc values hosted by high-level, high energy epithermal quartz breccias and veins.

The association of the veins and breccias with a large north-east-trending aeromagnetic demagnetised zone in combination with widespread surface alteration suggests that this mineralisation may be associated with a porphyry copper system laterally or at depth".

FIRST HIT VEIN

Discussion

Figure 1 shows the regional geology, location of the First Hit Vein, and the Paradise and Mabas Prospects. The First Hit drill hole locations are also shown. Figure 2 shows the longitudinal projection of the First Hit drill hole intersections.

Work in 2004 involved drilling of the First Hit Vein in conjunction with underground development via a 30 metre deep inclined winze down the vein-breccia to assist in understanding the mineralisation. By chance, the winze was sunk at a contact between well banded and high grade vein on the north wall and polylithic hydrothermal quartz breccias on the south wall containing fragments of various different vein and silica types, and with lower grade gold values.

The drilling has indicated three zones of mineralisation as being partly developed as footwall and hanging wall zones and a well developed central zone (First Hit Vein) which has the highest grades and a more prominent silver-polymetallic association.

The First Hit Vein in the drilling mainly consists of brecciated vein material, generally with good gold grades, but somewhat erratic due possibly to the nature of the material. Some intersections, such as in SDDH 2B, consist of brecciated massive sulphide material including fragments of chalcopyrite and galena-sphalerite. Sphalerite-rich breccias patches were encountered at the south side of the bottom of the winze. The base metal breccia fragments suggest that they may be derived from a source at depth with the breccia zone appearing to be shoot-like with a northeast plunge.

Regional Setting

Subsequent to the drilling in 2004, an aeromagnetic survey was completed which showed the First Hit Vein set are on the northern edge of a large, northeast-trending demagnetised zone over 2,000 metres wide and approximately 8,000 metres long, part of which is shown on Figure 1. A number of features within this zone were interpreted to be suggestive of intrusive bodies, possibly porphyry copper-related. Field work has established that outcropping areas of the northern side of this zone show intense clay- pyrite alteration, which is presumed to extend across the bulk of the zone under cover to the south.

Sections of the demagnetised zone are covered by younger sediments, some grits and shales at the base and capped by white, semi-massive to massive limestone. This appears to be a remnant of the same younger sequence that occurs elsewhere to the north in the Company's tenements.

Drilling

Drilling is re-commencing at the First Hit Vein, and also at additional targets that have been outlined by recent field work. As the drill holes were not down hole surveyed in the early drilling, some holes will be repeated to establish the geometry of the mineralised system before step-out drilling is undertaken. Two rigs will be involved in the programme which will be results-driven over the next 4 to 6 months.



Table I. First Hit Vein drill hole results greater than 3 g/t gold and
greater than 0.2 metres downhole

Azim-
Dip uth Grade (uncut)
Hole (degr- (degr- From Width (g/t gold, g/t Ag,
Number East North ees) ees) (metres) (metres) Cu, % Pb, % Zn)
----------------------------------------------------------------------------
35.75, 544, 0.38,
SDDH 2B 616944 899267 -55 316 108.50 1.00 1.88, 1.62
----------------------------------------------------------------------------
9.76, 142, 0.30,
SDDH 4 616912 899318 -59 290 89.50 0.20 1.18, 0.40
----------------------------------------------------------------------------
3.26, 32, 0.20, 0.20,
SDDH 5 616964 899344 -54 345 71.80 0.95 0.61
----------------------------------------------------------------------------
4.97, 78, 0.74,
SDDH 9 616979 899250 -67 319 176.20 0.20 1.51, 1.54
----------------------------------------------------------------------------
16.30, 244, 1.32,
SDDH 27 616921 899334 -73 300 60.80 1.00 2.65, 4.97
----------------------------------------
71.05 5.95 9.63, not assayed
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SDDH 28 616922 899307 -70 300 89.95 2.05 20.54, not assayed
----------------------------------------------------------------------------
SDDH 29 616961 899315 -72 300 112.25 0.90 15.32, not assayed
----------------------------------------------------------------------------
SDDH 31 616922 899254 -75 315 174.25 0.75 3.94, not assayed
----------------------------------------------------------------------------
SDDH 34 617033 899279 -65 310 173.80 0.40 6.87, not assayed
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SDDH 35 617000 899305 -65 310 128.20 0.85 5.05, not assayed
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Notes:
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(i) Intersection widths are downhole drill widths not true widths;
(ii) All assays are by McPhar Geoservices Inc laboratory in Manila;
(iii) Grid coordinates based on the Philippine Reference System 92;
(iv) The drill holes have not been downhole surveyed.


OTHER PROSPECTS

Paradise Prospect

Holes SDDH 19 and 22 were drilled at the Paradise Prospect which consists of an outcropping silica-barite cap with anomalous gold values. Drilling encountered a 1.60 metre wide barite vein containing 0.89 g/t gold. Extensive clay-pyrite alteration of volcanics was uncovered in road cuttings to the south and northeast of the silica outcrops.

Mabas Prospect

Holes SDDH 15, 16, 18, 20, 21, 23 and 24 were drilled at the Mabas Prospect where there were some existing workings. The best drill-hole intersection below the workings was 1 metre at 5.64 g/t gold in SDDH 24. The workings were re-opened and developed. The mineralisation consisted of generally black chalcedonic silica with some lead-zinc mineralisation and gold values in the 6 to 8 g/t range. The silica appeared to be confined to a lens or boudin within the Mabas Shear zone.

Mabas South Prospect

The Mabas South Prospect has been discovered by recent field work, and whilst a narrow vein at less than 0.5 metres wide, has consistently returned gold values around 10 g/t gold in most samples. This vein will be drilled.

DRILL HOLE SAMPLING AND ASSAYING PROCEDURES

Samples were taken from mainly HQ sized (hole outside diameter 96 mm, hole inside diameter 63.5mm) and some NQ sized (hole outside diameter 75.8 mm, hold inside diameter 47.6 mm) drill core. The selected sample intervals were halved by diamond saw and half the core was bagged, numbered and sent to the Company laboratory. In a small number of cases to confirm the geological logging, the selected interval was re-split and 1/4 core re-submitted for assay at the laboratory of McPhar Geoservices Inc.

("McPhar"), a NATA and ISO 9001/2000 accredited laboratory in Manila.

The gold assaying used fire assay on a 30 gram sample with an Atomic Absorption Spectrometry ("AAS") finish. A selected number of samples were checked using gravimetric fire assay techniques. Duplicate samples and standards will be included in each batch of check samples.

Copper, lead, zinc and silver assaying were conducted by AAS in the latter stages following a concentrated acid leach on a 1 gram sample.

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 Managing Director 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 "Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and is a "Qualified Person" as defined in "National Instrument 43-101" of the Canadian Securities Administrators. 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.

Refer to the Technical Report which was filed on www.sedar.com in March 2010 for further discussion of the Co-O Deposit's geology, structural controls, drilling, sampling and assaying information, and any known material environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant issue.

ABOUT MEDUSA MINING LIMITED

Medusa Mining Limited ("Medusa" or the "Company"), a public company listed on the ASX, AIM and the TSX, is an Australian based gold producer, focussed solely on the Philippines.

With current mineral resources comprising indicated 580,000 ounces of gold and inferred 1,310,000 ounces of gold, Medusa's corporate strategy is to become a mid-tier, 300,000 to 400,000 ounce per year, low-cost gold producer.

The Company is currently expanding its high grade Co-O Mine operations (indicated resources 580,000 ounces of gold inclusive of a probable reserve of 500,000 ounces of gold, and inferred resources 660,000 ounces of gold) to increase its forecast production to 100,000 ounces per year in 2010, and is conducting near mine exploration to assess the possibilities of further expansion to 200,000 ounces per year. Current cash costs at the Co-O Mine are approximately US$190 per ounce.

A pipe-line of deposits is now being established with the Bananghilig Deposit (inferred resource of 650,000 ounces of gold) recently added and which is expected to expand, potentially in conjunction with nearby discoveries.

Further potential upside exists in the discovery of substantial copper deposits within the tenement holding of more than 800 km2.

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.

To view Fig. 1, please visit the following link: http://media3.marketwire.com/docs/mml_04_20_fig_1.pdf

To view Fig. 2, please visit the following link: http://media3.marketwire.com/docs/mml_04_20_fig_2.pdf

ABN: 60 099 377 849

Contact Information

  • Australia
    Medusa Mining Limited
    Geoffrey Davis, Managing Director
    +61 8 9367 0601
    or
    Australia
    Medusa Mining Limited
    Roy Daniel, Finance Director
    +61 8 9367 0601
    +61 8 9367 0602 (FAX)
    admin@medusamining.com.au
    www.medusamining.com.au
    or
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    Fairfax I.S. PLC
    Nominated Adviser and Broker
    Ewan Leggat/Laura Littley
    44 (0)20 7598 5368
    or
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    Lothbury Financial Services Limited
    Michael Padley/Libby Moss
    +44 (0)20 7868 2567
    or
    Canada
    Nicholas Sayce
    Investor Relations
    +1 416 822 4404