Co-O Mine Resource Update (1496L)

TIDMMML

RNS Number : 1496L

Medusa Mining Limited

27 July 2011

 
              MEDUSA MINING LIMITED 
                ABN: 60 099 377 849 
          Unit 7, 11 Preston Street 
                       Como WA 6152 
                         PO Box 860 
             Canning Bridge WA 6153 
          Telephone: [phone] 
          Facsimile: [phone] 
   Email: [e-mail] 
  Internet: www.medusamining.com.au 
 

27 July 2011

Co-O MINE MINERAL RESOURCE INCREASES

(ASX & LSE: MML)

Medusa Mining Limited ("Medusa" or the "Company"), through its Philippines operating company, Philsaga Mining Corporation ("Philsaga"), advises that it has increased the Global Resources at its Co-O Mine by 30% to 1,960,000 ounces from 1,501,000 ounces (and after taking into account gold produced since 21 June 2010).

As a result of the new resource model contained in this report and drill results announced on 6 July 2011, the Company will be revising the Conceptual Exploration Target size for the Co-O Mine.

Table I. Co-O Mine mineral resource estimate at 30 June 2011

 
 Category                         > 0 g/t gold 
---------------------  --------------------------------- 
                         tonnes     g/t gold    ounces 
---------------------  ----------  ---------  ---------- 
 Indicated resources    1,601,000       12.0     616,000 
---------------------  ----------  ---------  ---------- 
 Inferred resources     4,747,000        8.8   1,344,000 
---------------------  ----------  ---------  ---------- 
 TOTAL RESOURCES        6,348,000        9.6   1,960,000 
---------------------  ----------  ---------  ---------- 
 

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

"This extremely pleasing result highlights the exceptional potential of the Co-O Mine vein system. It means we have added approximately 560,000 ounces (including replacing the ounces produced during the year) by drilling in the last 12 months at a drilling discovery cost of approximately US$24 per ounce. At this point there is no geological reason why a similar result can't be achieved in this current financial year as we continue work with five underground rigs and six surface rigs.

The slight resource grade variation compared to last year is due primarily to drilling in the tops of the East Agsao veins to the east-northeast where we see clear trends in the drilling of increasing grades with depth, and we anticipate grades should increase in this area as drilling becomes deeper.

We anticipate being able to expand the Co-O vein system for quite some time yet."

MINERAL RESOURCE MODEL

Discussion

Surface and underground diamond drilling has continued since the last resource model update based on data as at 21 June 2010 and announced on 22 July 2010 and has focused on infilling some data deficient areas and on extending the Co-O vein system along the northern side and at the eastern end of the mine.

The variation in resource grade compared to last year is due primarily to the addition of the extensive veins to the east-northeast where drilling has followed the vein structures to depth demonstrating increasing grades with depth. A large number of the drill hole intersections in this area are still in the tops of the veins where it is anticipated that grades should increase with depth as indicated by the trends.

It should be noted that not all drill hole intersections reported since 21 June 2010 (see announcements dated 29 October 2010, 18 January 2011, 5 April 2011 and 6 July 2011) are able to be incorporated into the resource estimate, particularly where the spacing of drilling is too wide to facilitate high levels of confidence in vein interpretations.

Figure 1 (please see link at the end of this announcement) shows the updated 3D resource model. The veins are open at depth and currently only limited by the depth and density of drilling.

Figure 2 (please see link at the end of this announcement) is the Level 6 map of the Co-O Mine area showing the veins in the 3D resource model at Level 6. This vein distribution on the plan shows that areas to the west, east, south and north require infill and additional deeper drilling to extend the veins down to Level 6 and below as some veins are still only partly defined to shallow depths, eg, the Royal Veins, some of the northern East Agsao Veins and parts of the western end of the vein system.

Table II is a summary of the resources for the major veins. Indicated resources are primarily located around the areas of underground development and Inferred resources are drilling only. Resources have been estimated for 46 veins at this stage.

Table II. Co-O Mine mineral resource estimates for the major veins at 30 June 2011 with >=50,000 ounces

 
 Vein name             Category              > 0 g/t gold 
-------------------  -----------  --------------------------------- 
                                                          contained 
                                    tonnes     g/t gold     ounces 
-------------------  -----------  ----------  ---------  ---------- 
 Great Hamish HW      Indicated       48,000       11.4      18,000 
  Inferred                           104,000       10.3      34,000 
 -------------------------------  ----------  ---------  ---------- 
 Great Hamish         Indicated      281,000       19.7     178,000 
  Inferred                           343,000       12.5     138,000 
 -------------------------------  ----------  ---------  ---------- 
 Great Hamish FW      Indicated       49,000       12.8      20,000 
  Inferred                           194,000        8.8      55,000 
 -------------------------------  ----------  ---------  ---------- 
 Great Hamish East 
  FW2                 Indicated       86,000       10.4      29,000 
  Inferred                           536,000       12.9     223,000 
 -------------------------------  ----------  ---------  ---------- 
 Central              Indicated      367,000        9.6     113,000 
  Inferred                           267,000        3.3      28,000 
 -------------------------------  ----------  ---------  ---------- 
 Jeremy               Indicated      146,000       10.9      51,000 
  Inferred                           118,000        4.3      16,000 
 -------------------------------  ----------  ---------  ---------- 
 Catto 1              Indicated       54,000       20.9      37,000 
  Inferred                            90,000       26.2      76,000 
 -------------------------------  ----------  ---------  ---------- 
 Roysan               Indicated       83,000       19.1      51,000 
-------------------  -----------  ----------  ---------  ---------- 
  Inferred                            94,000       12.8      38,000 
 -------------------------------  ----------  ---------  ---------- 
 East Agsao 2         Inferred       343,000       10.0     110,000 
-------------------  -----------  ----------  ---------  ---------- 
 East Agsao 7         Inferred       422,000        7.6     104,000 
-------------------  -----------  ----------  ---------  ---------- 
 East Agsao 14        Inferred       272,000        7.3      64,000 
-------------------  -----------  ----------  ---------  ---------- 
 East Agsao 15        Inferred       701,000        6.8     152,000 
-------------------  -----------  ----------  ---------  ---------- 
 Other veins          Indicated      487,000        8.4     119,000 
  Inferred                         1,264,000        7.2     306,000 
 
 Total Indicated Resources         1,601,000       12.0     616,000 
--------------------------------  ----------  ---------  ---------- 
 Total Inferred Resources          4,747,000        8.8   1,344,000 
--------------------------------  ----------  ---------  ---------- 
 TOTAL RESOURCES                   6,348,000        9.6   1,960,000 
--------------------------------  ----------  ---------  ---------- 
 

Notes:

- A lower cut-off of 0 g/t gold has been applied

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

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

Vein modelling

Cube Consulting Pty Ltd of Perth, Western Australia was contracted to undertake the resource estimations. A wireframe model of the vein system and the mine depletions were based on all available information as at 30 June 2011. 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. Mineral resources have been reported in accordance with The 2004 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code).

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 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" and is a "Qualified Person". 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.

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 Australian 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.

For further information please contact:

 
 Australia 
 Medusa Mining Limited            [phone] 
 Geoffrey Davis, Chairman 
 Peter Hepburn-Brown, Managing 
  Director 
 United Kingdom 
 Fairfax I.S. PLC                 [phone] 
 Financial Adviser and Broker 
 Ewan Leggat/Laura Littley 
 
 

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