Discovery at Kamarangan

    Discovery at Kamarangan
             



14 August 2008

                        MEDUSA MINING LIMITED
                             (AIM: MML)

    DISCOVERY OF MINERALISED PORPHYRY & MAGNETITE-COPPER-GOLD AT
                             KAMARANGAN

Medusa Mining Limited ("Medusa" or the "Company"), the Australian
based company operating and developing gold mines in the Philippines,
through its Philippines operating company Philsaga Mining
Corporation, advises that the first two drill holes at Kamarangan
have intersected a potentially large mineralised quartz diorite
porphyry complex with visible copper and molybdenum.  The drill holes
have also intersected zones of massive magnetite with gold and copper
mineralisation in the overlying skarn rocks.  The potential size of
the mineralised intrusive complex is interpreted to be up to 2,000
metres east-west by over 800 metres north-south.

The first two drill holes are interpreted to be drilling near the
eastern boundary between the propylitic and silicic alteration shells
of the quartz diorite complex.  The silicic zones exhibit good
stockworking and intense silicification.  Assays have been received
for the upper sections of the first two holes, which are continuing.

Highlights to date include:

Hole KAM 1:
Magnetite-rich skarn: 11 metres at 0.50 g/t gold and 0.66% copper
including 3 metres at 1.35 g/t gold and 1.49% copper.  The magnetite
contents are yet to be determined.

Hole KAM 2:
Weathered diorite: 29 metres at 0.15% copper; and Magnetite-rich
skarn: 3.2 metres at 1.49g/t gold, 0.52% copper.

Geoff Davis, Managing Director of Medusa, commented:

"The Company  is  delighted  with  the success  from  the  first  two
on-going holes at Kamarangan.  These demonstrate that the  previously
identified regional-scale features are indeed linked to a potentially
major mineralised porphyry  system, with  indications of  significant
mineralisation in the surrounding rocks.

"As soon as more rigs are available, Kamarangan together with Lingig
and the on-going drilling at Co-O will be the major foci for some
time to come."


For further information, please contact:


Medusa Mining Limited                   [phone]
Geoffrey Davis, Managing Director
Roy Daniel, Finance Director

Fairfax I.S. PLC                        [phone]
Nominated Adviser / Joint Broker
Jeremy Porter

Mirabaud Securities Limited             [phone]
Joint Broker
Peter Krens

Lothbury Financial                      [phone]
Michael Padley / Louise Davis


BACKGROUND

The Tambis project is operated under a Mining Agreement with Philex
Gold Philippines Inc. over MPSA application APSA-000022-XIII, which
covers 6,262 hectares.  Permits allowing drilling were received in
June 2008.

Figure 1 (please see the link at the end of this announcement) shows
the location of the Kamarangan prospect in the Tambis-Barobo region.
 Figure 2 (please see the link at the end of this announcement) shows
the various geological and geophysical features of the region and the
location of the Kamarangan area.

Detailed descriptions of previous work are contained in the
announcements of 11 June 2008 and 29 February 2008.


GEOLOGICAL SETTING

The Kamarangan area is underlain by a steeply dipping, well-banded
calcareous sequence that appears to be up to approximately 2,000
metres wide.  Previous interpretations from bedding seen in trenches
suggested that this was a flat-lying sequence.  The apparent flat
dips are now confirmed to have been a result of slumping through near
surface weathering.  This sequence has been changed to skarn rocks
over an approximate area of 2,000 metres by 800 metres.

As shown in Figure 2, the Kamarangan discovery is centrally located
in a large aeromagnetic anomaly approximately ten kilometres in
diameter.  The surface geology outcrops are limited mainly to
magnetite-rich horizons with secondary hematite.

Figure 3 (please see the link at the end of this announcement) shows
the current interpretation of the surface geology with at least five
north-trending magnetite-rich zones of various widths and the
locations of drill holes KAM 1 and 2 which are 100 metres apart.

Plate 1 (please see the link at the end of this announcement) shows a
cutting through the magnetite-secondary hematite-rich zones in front
of drill hole KAM 2, where the zone is approximately seven metres
wide, and consists of mainly massive magnetite and secondary
hematite.

The drill hole magnetite-rich samples will be accumulated for three
or four holes and then sent to Perth, Western Australia for
estimation of the magnetite contents and preliminary metallurgical
testing.

Classic porphyry copper model

The classic geological model for a mineralised porphyry copper
intrusive involves the formation of "shells" or "zones" of different
alteration minerals around a core of higher grade mineralisation.
 The shells from the outside are:

* An outer shell of propylitic alteration where the rocks are
  generally greenish from high contents of predominantly chlorite and
  epidote with rare veining;
* The next shell is silicic where the rocks are more bleached,
  silicification is more common and veining is more intense, with
  sporadic copper mineralisation;
* The next shell is phyllic where the rocks are also bleached and the
  mica variety sericite becomes common, with increasing amounts of
  copper mineralisation; and
* The inner shell is potassic which is usually darker in colour due
  to the mica variety biotite (and sometimes magnetite), is intensely
  veined and contains the highest copper grades of the deposit.

The first two shells have already been intersected in the drilling to
date.


DRILLING RESULTS

Drill holes KAM 1 and 2 were positioned to drill through the
previously sampled Dumaag magnetite-hematite zone (21 samples
averaged 37% iron and 9.5 g/t gold), around which there are numerous
alluvial gold workings, and to test the skarn sequence across strike.

Drill holes KAM 1 and 2 have resulted in the discovery of a
potentially large porphyry copper-molybdenum quartz diorite complex
below the extensive 2,000 metre by 800 metre area of skarned
sediments.  In the drill holes, the calcareous sediments are
generally well-bedded and have undergone variable alteration from
replacement by massive magnetite-sulphide, with minor epidote-garnet,
to common sulphides along the bedding planes.  In some cases, these
exhibit epidote and lesser red garnet development to total
replacement by silica with disseminated sulphides.

Drill hole KAM 2 to date has generally intersected near surface zones
of diorite with higher copper values than KAM 1.

Drill hole KAM 1

Assays have been received for the first 291 metres of the hole.  The
drill hole is currently at a depth of 551 metres (as of 11 August)
and is continuing in silicic to propylitic altered and stockworked
quartz diorite rocks with visible copper minerals (chalcopyrite and
chalcocite) and rare molybdenite.

The hole intersected massive magnetite at 30.30 metres.  The
magnetite is crystalline, visually estimated grain size
>0.5millimetre, friable and the intervals are visually estimated to
contain from 20% up to 60% magnetite.  It is banded in places and
contains sulphides, mainly as pyrite with minor chalcopyrite (copper
sulphide) and some clayey material.  It is not cemented with silica
like many other magnetite deposits.

This hole appears to be drilling down the eastern margin of the
complex and is demonstrating that the alteration in the porphyry is
zoned with an outer propylitic alteration shell (chlorite and epidote
with minor pyrite and rare veining) to silicic alteration (increasing
quartz veining/stockworking, partly bleached, some chalcocite smears
along fractures and within the veining, minor molybdenite grains,
veinlets and clots, and chalcopyrite as disseminations, clots and
veinlets) to minor silicic-phyllic alteration where the rock is
intensely bleached, veining is more intense with some containing
sericite and chalcopyrite becoming more common with molybdenite
veining and clots.  Molybdenite seems to be more commonly associated
with a later phase of grey quartz veining whereas the chalcopyrite is
more commonly associated with white quartz veining.

To date this drill hole appears to be predominantly within the
propylitic with lesser silic alteration zones of the diorite porphyry
complex.  Copper values in the diorite are sporadic, as is normal in
the outer alteration shells, and range between approximately 0.05 to
0.15% and molybdenum to 58 ppm.

Drill hole KAM 2

Assay results have been received for the first 95.20 metres of the
hole.  The drill hole also appears to be drilling down the eastern
contact of the complex and is currently at a depth of 470 metres (as
of 11 August) and is continuing in silicic and propylitic altered and
stockworked quartz diorite rocks with visible copper minerals
(chalcopyrite and rare bornite).

Drill hole KAM 2 has intersected near surface predominantly
weathered, silicic altered and veined porphyry with significant
copper values averaging 0.15% over 29 metres.

The hole also intersected massive magnetite at 41 metres within a
wide zone of skarned rocks which also contain elevated copper values
of generally above 0.1% copper.

Hole KAM 2 at depth has also intersected zones of intensely
silicified or skarned limestone containing disseminated chalcopyrite.

Table I.  Summary of drill hole results from KAM 1 (to 291.7 metres)
and KAM 2 (to 95.2 metres)


+----------------------------------------------------------------------------------------------+
|Hole  |  East  |   North   | Azimuth | Dip |   From   |  Width   | Gold  | Copper | Comments  |
|      |        |           |   (°)   | (°) | (metres) | (metres) | (g/t) |  (%)   |           |
|------+--------+-----------+---------+-----+----------+----------+-------+--------+-----------|
|KAM 1 | 612304 |  942837   |   90    | -60 |  30.30   |  11.00   | 0.50  |  0.66  | Magnetite |
|------+--------+-----------+---------+-----+----------+----------+-------+--------+-----------|
|      |        | including |         |     |  30.30   |   3.00   | 1.35  |  1.49  |           |
|------+--------+-----------+---------+-----+----------+----------+-------+--------+-----------|
|      |        |           |         |     |          |          |       |        | Weathered |
|KAM 2 | 612307 |  942736   |   90    | -60 |   2.00   |  29.00   |   -   |  0.15  |  diorite  |
|------+--------+-----------+---------+-----+----------+----------+-------+--------+-----------|
|      |        |           |         |     |  41.00   |   3.20   | 1.49  |  0.52  | Magnetite |
+----------------------------------------------------------------------------------------------+


Notes:
(i)    Assaying by McPhar Geoservices Phils Inc. Au by fire assay
with AAS finish; Ag, Cu, Pb, Zn and Mo by AAS; and
(ii)   Magnetite contents yet to be determined

Discussion

The drilling indicates that the Kamarangan area contains a
potentially very large mineralised quartz diorite complex that is
exhibiting classic porphyry copper alteration features and also
replacement mineralisation in the surrounding skarn rocks.



Information in this report relating  to Exploration Results 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".  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.

- ---END OF MESSAGE---




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