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

Medusa Mining Limited

November 16, 2010 20:59 ET

Medusa Mining Limited: Chairman's Address at AGM

COMO, WESTERN AUSTRALIA--(Marketwire - Nov. 16, 2010) - Medusa Mining Limited (TSX:MLL)(ASX:MML)(LSE:MML) -

Please find attached the Chairman's address which will be delivered today at the Company's Annual General Meeting, to be held in the Goldsworthy Room, The Sheraton Hotel, 207 Adelaide Terrace, Perth, Western Australia at 11.00 am.

CHAIRMAN'S ADDRESS

Dear Shareholders,

This is my first AGM as Chairman of Medusa and I would like to take this opportunity to introduce myself.

My background is as a mining engineer by qualification and I have learned my trade in the Canadian mining industry for more than 40 years, mostly in underground mines, mining commodities such as potash, coal, gold, zinc and copper. In more recent years I have managed major mining projects, been CEO of HudBay Minerals Inc., as well as Chairman of the Mining Association of Canada.

Since joining Medusa in July this year, my expectations have been more than confirmed as the Company has achieved substantial and stable production and established itself as a gold producer with cash costs among the lowest in the world. Your Board of Directors together with Management plans to continue this strong organic growth and cost performance profile, and has set an achievable corporate objective of producing between 300,000 and 400,000 ounces of gold within 5 years.

Our Managing Director, Geoff Davis, who has a profound knowledge of Philippine geology, advises that our well established Co-O Mine and 820 square kilometre of land position which comprises a structurally well-defined but relatively unexplored mineral field, has the geological potential to achieve our corporate objective. This region of the Philippines is well endowed with minerals and the demonstrated potential at the Co-O Mine, several advanced exploration targets, as well as the potential to discover new deposits, all give us confidence that Medusa's 5 year organic growth objective is well underpinned.

Within and around the Co-O Mine, together with areas identified as advanced exploration targets, we will this year continue our US$21 million annual exploration programme. This programme is expected to extend the potential for mineral resources at the Co-O Mine, improve our confidence of other mineral resources and identify new deposits.

At site our workforce now exceeds 1,900 people with a wide range of skill sets that also benefit local businesses. We are proud to operate with minimal expatriates, attesting to the abundance of skilled personnel in the Philippines and the willingness of employees to develop new skills in the fields of mining and exploration. We support the provincial government and local municipalities through payment of local taxes, employment, and community programmes.

Well before financial year-end, our Co-O Mine and Mill were consistently operating at a rate equivalent to 100,000 ounces of gold per year. The Company produced 89,679 ounces of gold in the last financial year and as one of the lowest cash cost producers in the world generated a net profit after tax of US$65.8 million. The Company is in a strong positive cash position and expects to self-fund all cash requirements for the next financial year.

We look forward to the immediate year ahead and plan to continue to make improvements with the aim of increasing gold production from the Co-O Mine by having available the full 1,000 tonne per day ore processing capacity of the Co-O Mill. In the 2011-2012 financial year, we also expect to have the new Saga vertical shaft which will access new mining areas.

In addition, as announced earlier this morning, I am pleased to tell you the Company is planning to further increase production capacity by building a new mill capable of producing 200,000 ounces per year and by continuing to expand the mine.

My observations from a recent site visit are that we have a very dedicated workforce who work well together, with common goals which include safety, achieving production targets and controlling costs. It is also clear that our mining and exploration activities fit well with the local communities near our work sites.

During this last financial year Medusa has also grown corporately. In addition to the listings on the ASX and TSX, the Company has delisted from AIM and is now listed on the LSE. Recently, Medusa also announced and paid a maiden dividend, recognising the substantial support of the Company's shareholders, and aims to pay a regular dividend annually.

Medusa today, I believe is in an enviable position with its high grade Co-O Mine, recent near mine exploration success to further fuel growth, together with the potential of regional exploration success to achieve our 5 year self-funded organic production target. 

In closing on behalf of the Board of Directors, I would like to particularly thank Geoff Davis our MD, and his team for extraordinary leadership in guiding Medusa through challenging times to become a demonstrable low cost producer and also our Philippine workforce who make safe production and exploration an everyday reality. To our shareholders, thank you for the solid support over the last many years and I hope that the demonstrated performance to date and the growth opportunities within reach will convince you to continue that strong support.

Thank You

Peter R Jones, Chairman

ABN: 60 099 377 849

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