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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Medusa Mining | LSE:MML | London | Ordinary Share | AU000000MML0 | ORD NPV (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
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MEDUSA MINING LIMITED
ABN: 60 099 377 849
Unit 7, 11 Preston Street
Como WA 6152
PO Box 860
Canning Bridge WA 6153
Telephone: 618-9367 0601
Facsimile: 618-9367 0602
Email: admin@medusamining.com.au <mailto:admin@medusamining.com.au>
Internet: www.medusamining.com.au <http://www.medusamining.com.au/>
ANNOUNCEMENT
24 February 2010
RECORD INTERIM FINANCIAL RESULTS
Medusa Mining Limited ("Medusa" or "the Company") (ASX & AIM: MML; TSX: MLL), is
pleased to present its interim financial results for the six months to 31
December 2009, the highlight of which is a record half-yearly Net Profit After
Tax ("NPAT") of US$28.3 million.
HIGHLIGHTS FOR THE SIX MONTHS:
Financials
+------------------------+------+----------+----------+----------+-------+
| Key Results | Unit | Dec 2009 | Dec 2008 | Variance | (%) |
+------------------------+------+----------+----------+----------+-------+
| Revenues | US$ | $41.3 M | $15.8 M | $25.5 M | 161 % |
+------------------------+------+----------+----------+----------+-------+
| EBITDA | US$ | $31.5 M | $9.6 M | $21.9 M | 228 % |
+------------------------+------+----------+----------+----------+-------+
| EBIT | US$ | $28.3 M | $8.0 M | $20.3 M | 254 % |
+------------------------+------+----------+----------+----------+-------+
| NPAT | US$ | $28.3 M | $9.4 M | $18.9 M | 201 % |
+------------------------+------+----------+----------+----------+-------+
| EPS (basic) | US$ | $0.168 | $0.065 | $0.103 | 158 % |
+------------------------+------+----------+----------+----------+-------+
| Cash at bank & deposit | US$ | $35.5 M | $4.0 M | $31.5 M | 788 % |
+------------------------+------+----------+----------+----------+-------+
* Record half-yearly Net Profit After Tax ("NPAT") of US$28.3 million, up
201% from US$9.4 million in the prior corresponding period, representing
basic earnings of US$0.168 per share on a weighted average basis;
* A 228% increase in half-yearly Earning Before Interest, Tax, Depreciation
and Amortization ("EBITDA") of US$31.5 million for the six month period to
December 2009 (six months to December 2008: US$9.6 million);
* Revenues increased by 161% to a record US$41.3 million, primarily due to
increased gold production and a higher price received on sale of gold.
Medusa is an un-hedged gold producer and received an average gold price of
US$1,047 per ounce from the sale of 39,162 ounces of gold for the six month
period to December 2009 (six months to December 2008:19,144 ounces at US$812
per ounce);
* The Company is debt free and had a cash balance of US$35.5 million at 31
December 2009.
Revenues
(Please see Graph 1 on the attached link at the end of this announcement)
Operations
+---------------------+--------+----------+----------+----------+------+
| Key Results | Unit | Dec 2009 | Dec 2008 | Variance | (%) |
+---------------------+--------+----------+----------+----------+------+
| Production | ozs | 39,162 | 19,144 | 20,018 | 104% |
+---------------------+--------+----------+----------+----------+------+
| Cash costs | US$ | $189 | $225 | $36 | 16% |
+---------------------+--------+----------+----------+----------+------+
| Gold price received | US$/oz | $1,047 | $812 | $235 | 29% |
+---------------------+--------+----------+----------+----------+------+
* The Company produced a record 39,162 ounces of gold for the half-year, an
increase of 20,018 ounces or 105% from the previous corresponding period, at
an average grade of 16.65 g/t gold (six months to December 2008: 12.71 g/t
gold);
* Average cash costs for the half-year down 16% to US$189 per ounce, compared
to the prior previous corresponding period's costs of US$225 per ounce;
Production
(Please see Graph 2 on the attached link at the end of this announcement)
Phase II of the Company's expansion programme to produce 100,000 annualised
ounces is on schedule, and the incremental benefits of that expansion are
flowing through as evidenced by the record gold production of 39,162 ounces for
the last six months.
Outlook
The forecast gold production for the fiscal year to 30 June 2010 has been
revised upwards from 86,000 ounces to 89,000 ounces at an anticipated average
cash cost of US$190 per ounce.
A breakdown of actual and forecasted production ounces and cost per ounce by
quarters for the last six quarters and the remaining two quarters of this fiscal
year is highlighted in Graph 3 (Please see Graph 3 on the attached link at the
end of this announcement)
Geoffrey Davis, Managing Director of Medusa, commented:
"The Company has regularly broken its production targets on a quarterly basis
and I am extremely pleased with the total of 39,162 ounces for the half year.
This record production coupled with a healthy gold price received, has
contributed to a record half-yearly net after tax profit figure of US$28.3
million. Furthermore, the very low production costs of around US$190 per ounce
should be highlighted.
"Remarkably this has all been achieved through a period of intense
re-development of the Co-O Mine and associated infrastructure, and with the
expansion programme now complete, our team can concentrate on optimising current
production levels at the Co-O Mine, and also focus on increasing output via the
addition of new projects as the Company grows into a mid-tier gold producer".
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 > 800km(2).
For further information please contact:
Australia
Medusa Mining Limited +61 8 9367 0601
Geoffrey Davis, Managing Director
Roy Daniel, Finance Director
United Kingdom
Fairfax I.S. PLC +44 (0)20 7598 5368
Nominated Adviser and Broker
Ewan Leggat/Laura Littley
Lothbury Financial +44 (0)20 7011 9411
Michael Padley/Libby Moss
Canada
Nicholas Sayce, Investor Relations +1 416 822 4404
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.
OPERATIONS 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).
GOLD PRODUCTION
The production statistics for the six months to 31 December 2009 with
comparatives for the December 2008 half year are summarised in Table I.
Table I. Gold production statistics
+-----------------------+------+---------------+---------------+--------+------+
| | |Half-year ended|Half-year ended| | |
|Description | Unit | | |Variance| (%)|
| | | 31 Dec 2009 | 31 Dec 2008 | | |
+-----------------------+------+---------------+---------------+--------+------+
|Tonnes mined |tonnes| 93,498| 49,534 | 43,964| 88.8%|
+-----------------------+------+---------------+---------------+--------+------+
|Ore milled |tonnes| 78,055| 49,534 | 28,521| 57.6%|
+-----------------------+------+---------------+---------------+--------+------+
|Head grade | gpt | 16.65| 12.71| 3.94 | 31.0%|
+-----------------------+------+---------------+---------------+--------+------+
|Recovery | % | 94%| 92%| 2%| 2.2%|
+-----------------------+------+---------------+---------------+--------+------+
|Gold produced (1) |ounces| 39,162| 19,144 | 20,018|104.6%|
+-----------------------+------+---------------+---------------+--------+------+
|Cash costs (2) | US$ | US$189| US$225| US$36| 16.0%|
+-----------------------+------+---------------+---------------+--------+------+
|Gold sold |ounces| 39,162| 19,144| 20,018|104.6%|
+-----------------------+------+---------------+---------------+--------+------+
|Average gold price | US$ | US$1,047| US$812| US$235| 28.9%|
|received | | | | | |
+-----------------------+------+---------------+---------------+--------+------+
Note:
1. Gold production is actual gold produced during the period and does not
reflect changes in the balance of gold in circuit;
2. Cash costs refer to the cost of gold mined (net of mine development costs),
produced and sold and includes taxes, royalties and local production taxes
of US$46 per ounce for the Dec 2009 half-year (Dec 2008 half-year: US$44 per
ounce).
For the six months to 31 December 2009, the Company produced 39,162 ounces of
gold (compared to 19,144 ounces of gold for the corresponding period in 2008) at
grades averaging 16.65 g/t gold (Dec 2008: 12.71 g/t gold) and average cash
production costs of US$189 per ounce (Dec 2008: US$225 per ounce).
Medusa is an unhedged gold producer and received an average gold price of
US$1,047 per ounce from the sale of gold for the half-year.
Phase II of the Company's expansion programme is on schedule, and the
incremental benefits of that expansion are flowing through as evidenced by the
record gold production of 39,162 ounces for the past six months. The forecast
gold production for the fiscal year to 30 June 2010 has been revised upwards
from 86,000 ounces to 89,000 ounces at an anticipated average cash cost of
US$190 per ounce.
As described in the announcement dated 16 May 2007 regarding the occurrence of
"black leader" high grade mineralisation in some veins, there has been an
unusual amount of black leader material in recent mine development activities
which is responsible for the current high grades. The occurrence of black leader
material rarely shows up in drilling and at this stage, its occurrence is not
predictable.
A breakdown of actual and forecasted production ounces and cost per ounce by
quarters for the last six quarters and the remaining two quarters of this fiscal
year is highlighted in Graph 3 (please see the link at the end of this
announcement).
Co-O MINE
PHASE II EXPANSION
a. Mine Production
The mine can now produce at the required rate of approximately 750 tonnes per
day to achieve a production rate of approximately 100,000 ounces annualised.
The vertical Ventilation Shaft near the Baguio Shaft is being fitted with a skip
and headframe to haul mineralised material as sufficient mineralised material
has now been located above Level 1.
b. Mill Expansion
The new mill crushing, screening and washing circuits were completed on
schedule. A new back-up genset due to arrive early December was delayed by the
Christmas period until the second week of January. Commissioning of the mill
expansion has commenced.
c. Tailings Dam
Construction of a new eight year life tailings dam is progressing and is due for
completion in mid-year 2010 subject to favourable weather conditions.
d. Power
The Company has been evaluating several options to replace the rural power line
currently in use from San Francisco to the mill site with a dedicated power
line, as the current rural line is becoming unreliable due to the increase in
load. The favoured option (in agreement with the local power co-operative) will
involve the installation of a new power line along the same route as the current
power line and the cost of the capital outlay by the Company will be offset by a
reduction in future power tariffs.
.
RESOURCES AND RESERVES
On 18 January 2010 the Company announced it had completed a re-interpretation of
resource model for the Co-O Mine with the sole purpose of correcting
inconsistencies to the east of the Oriental Fault between previous drillhole
based interpretations and the on-going development on Level 5 from the Agsao
Shaft. The revised mineral resources are shown in Table II and the current
reserves in Table III.
Table II. Mineral Resource estimation as at 9 December 2009
+-----------+--------------------------------+
| | > 0 g/t gold |
| Category +-----------+----------+---------+
| | tonnes | g/t gold | ounces |
+-----------+-----------+----------+---------+
| Indicated | 1,450,000 | 12.3 | 580,000 |
+-----------+-----------+----------+---------+
| Inferred | 2,290,000 | 9.0 | 660,000 |
+-----------+-----------+----------+---------+
The resource estimations were undertaken by Cube Consulting Pty Ltd (2010).
Notes:
* Various uppercuts have been applied on an individual vein basis; and
* Resources are inclusive of reserves.
Table III. Mineral Reserve estimation summary as 17 July 2009
+----------+--------------------------------+
| | > 3 g/t gold |
| Category +-----------+----------+---------+
| | tonnes | g/t gold | ounces |
+----------+-----------+----------+---------+
| Probable | 1,041,000 | 14.90 | 500,000 |
+----------+-----------+----------+---------+
The reserve estimations were undertaken by Crosscut Consulting Pty Ltd (2009).
Discussion
Diamond drilling has continued since the resource model update announced on 1
July 2009 and focused on extending the Co-O vein system. A total of 52 drill
holes have been completed (as announced on 10 December 2009) since the previous
resource estimation and considered for inclusion in the re-interpreted resource
model in conjunction with available underground sampling data, and excluding
mined material.
Thirty five veins now have resources allocated to them, with a number of the new
veins, particularly the East Agsao series of veins, being open in almost all
directions. The vein system is open at depth.
It should be noted that a large number of drill holes in a number of areas shown
on Figure 4 (please see the link at the end of this announcement) are still to
be included in resource estimates, and will be included as the confidence levels
increase and demonstrated continuity improves through additional drilling and/or
development.
As a result of extensive development from the bottom of the Agsao Shaft (Level
5) since the previous resource estimate, this new wireframe model has corrected
previously noted (see announcement of 1 July 2009) inconsistent vein
orientations on the east side of the Oriental Fault. It is now clear from the
underground development that the vein system continues in an easterly direction,
disrupted in places by north-trending step-faulting, which generally down-throws
the veins on the east side of each fault. Re-interpretation as straight veins
has resulted in some inferred resources loss compared to the previous
interpretation of curved veins which was based solely on drillhole data. Figure
5 (please see the link at the end of this announcement) shows all the current
development in the mine.
Resource drilling is continuing with the aim of increasing confidence levels for
interpretation in some areas which will result in the inclusion of more drill
hole intersections as well as extensions to the vein system.
Stockwork/stringer mineralisation
At the western end of the mine, preliminary work suggests the possible presence
of a number of stockwork or stringer zones where narrow quartz veins over widths
of 5 to 6 metres have been developed. One of these has been defined as
approximately 40 metres long within the Great Hamish Vein. An Alimak rise within
this zone has been completed between Levels 2 and 3 demonstrating continuity and
that it is open above and below these levels. Two early bulk samples tested
through the mill returned head grades of 14 and 17 g/t gold. Alimak long-hole
stoping (much cheaper than shrink stoping) is about to commence in this zone and
will be employed if other similar zones are defined.
Other potentially similar stockwork or stringer zones may be present in parts of
other veins and a similar zone outcrops near the Tinago Shaft which will be
subject to additional exploration. A drive to connect the Baguio Shaft and the
Tinago Shaft on Level 3 is underway and expected to allow underground assessment
of previous drill hole TIN 3 with a similar interpreted style adjacent to the
Central Vein and between Levels 2 and 3. It returned two close spaced
intersections of 3.80 metres at 21.15 g/t gold and 6.60 metres at 2.45 g/t gold
(see announcement dated 28 February 2007).
Specific gravity
A programme of specific gravity ("SG") measurements is underway for the lower
levels of the mine. Initial results indicate that the currently used SG of 2.45
may be conservative. This programme should be completed before the next resource
estimate.
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 7 December 2009. 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 Mineral Resources and Ore Reserves (JORC
Code) and Canadian National Instrument 43-101.
Co-O MINE CONCEPTUAL TARGET SIZE **
Estimates (Table IV) have been undertaken for the Co-O Mine conceptual target
size** based on a drill-defined strike length of approximately 1,500 metres and
up to 2,000 metres based on potential extensions.
Aggregate across-strike widths of the veins of 5 and 8 metres (ie, adding the
width of each individual vein across strike to give an aggregate vein width) are
regarded as possibly conservative. Depths of between 500 and 750 metres below
Level 1 (adit level) in the mine are regarded as geologically reasonable as a
few deeper drill holes below 400 metres below Level 1 have intersected good
grade mineralisation.
The estimate used a grade range of 9 to 11 g/t gold with a preferred average
grade of the current resources of 10 g/t gold.
Table IV. Co-O Mine conceptual target parameters and estimates **
+-----------------+----------------+----------+----------+----------+----------+
| | Depth below |Aggregate | | |Conceptual|
|Strike length | Level I | |Conceptual|Gold grade| |
|(metres) | |Vein width| | |Contained |
| | (metres) | | tonnes | (g/t) | |
| | | (metres) | | | ounces |
+-----------------+----------------+----------+----------+----------+----------+
|1,500 | 500| 5| 9,375,000| 10 | 3,125,000|
+-----------------+----------------+----------+----------+----------+----------+
| | | 8|14,700,000| 10 | 4,725,000|
+-----------------+----------------+----------+----------+----------+----------+
| | | 10|18,750,000| 10 | 6,250,000|
+-----------------+----------------+----------+----------+----------+----------+
| | 750| 5|15,000,000| 10 | 5,000,000|
+-----------------+----------------+----------+----------+----------+----------+
| | | 8|22,050,000| 10 | 7,000,000|
+-----------------+----------------+----------+----------+----------+----------+
| | | 10|30,000,000| 10 |10,000,000|
+-----------------+----------------+----------+----------+----------+----------+
| | 1000| 5|18,750,000| 10 | 6,250,000|
+-----------------+----------------+----------+----------+----------+----------+
| | | 8|29,400,000| 10 | 9,450,000|
+-----------------+----------------+----------+----------+----------+----------+
| | | 10|37,500,000| 10 |12,500,000|
+-----------------+----------------+----------+----------+----------+----------+
|2,000 | 500| 5|12,500,000| 10 | 4,160,000|
+-----------------+----------------+----------+----------+----------+----------+
| | | 8|19,600,000| 10 | 6,300,000|
+-----------------+----------------+----------+----------+----------+----------+
| | | 10|25,000,000| 10 | 8,125,000|
+-----------------+----------------+----------+----------+----------+----------+
| | 750| 5|20,000,000| 10 | 6,660,000|
+-----------------+----------------+----------+----------+----------+----------+
| | | 8|29,400,000| 10 | 9,450,000|
+-----------------+----------------+----------+----------+----------+----------+
| | | 10|40,000,000| 10 |10,330,000|
+-----------------+----------------+----------+----------+----------+----------+
| | 1,000| 5|25,000,000| 10 | 8,125,000|
+-----------------+----------------+----------+----------+----------+----------+
| | | 8|39,200,000| 10 |10,200,000|
+-----------------+----------------+----------+----------+----------+----------+
| | | 10|50,000,000| 10 |16,250,000|
+-----------------+----------------+----------+----------+----------+----------+
Notes:
i. SG of 2.45 used for all estimates;
ii. Estimates rounded to nearest 1000; and
iii. Highlighted cases indicate most geologically reasonable based on current
knowledge.
** 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.
RESOURCE DRILLING
Table V lists the surface diamond drilling results greater than 3 g/t gold from
the Co-O Mine for drill holes MD 165 to MD 216 which are included in the new
resource estimate.
On 10 December 2009 the drilling results for drill holes MD 165 to 216 were
released. These results are summarised in Table III which should be read in
conjunction with the 10 December 2009 announcement which contains more detail
and intersections down to 0.2 metres downhole width.
Table V. Drill hole results >3 g/t gold and >0.5 metres downhole width for holes
MD 165 to MD 216.
+------+------+------+---+-------+--------+--------+-------------+
| | | |Dip|Azimuth| From| Width |Grade (uncut)|
|Hole | East |North | | | | | |
| | | |( °)| ( °) |(metres)|(metres)| (g/t gold)|
+------+------+------+---+-------+--------+--------+-------------+
|MD 166|613606|913221|-45| 186 | 45.55| 0.55 | 3.06|
+------+------+------+---+-------+--------+--------+-------------+
|MD 168|613423|913169|-47| 185 | 191.10| 4.00 | 3.76|
+------+------+------+---+-------+--------+--------+-------------+
|MD 170|613809|913202|-46| 190 | 109.40| 1.00 | 5.28|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 137.45| 0.50 | 8.27|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 519.85| 1.00 | 3.50|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 636.25| 2.15 | 18.43|
+------+------+------+---+-------+--------+--------+-------------+
|MD 171|614677|912995|-57| 166 | 413.80| 3.10 | 3.67|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 430.85| 1.00 | 7.40|
+------+------+------+---+-------+--------+--------+-------------+
|MD 172|613420|913124|-45| 171 | 54.85| 1.60 | 3.05|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 114.20| 1.00 | 7.41|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 127.20| 0.80 | 5.01|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 243.45| 0.85 | 83.47 |
+------+------+------+---+-------+--------+--------+-------------+
|MD 173|613411|913106|-47| 185 | 76.30| 0.50 | 13.21|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 99.10| 2.00 | 6.49|
+------+------+------+---+-------+--------+--------+-------------+
|MD 175|613713|913335|-55| 190 | 383.80| 1.00 | 4.16|
+------+------+------+---+-------+--------+--------+-------------+
|MD 178|614532|913023|-70| 160 | 314.10| 0.50 | 59.44|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 334.55| 0.65 | 18.71|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 395.05| 2.90 | 6.75|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 459.80| 1.55 | 9.73|
+------+------+------+---+-------+--------+--------+-------------+
|MD 179|613351|912825|-68| 217 | 65.65| 2.80 | 7.43|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 113.65| 0.75 | 100.63 |
+------+------+------+---+-------+--------+--------+-------------+
|MD 180|613870|913302|-45| 190 | 403.50| 0.65 | 8.37|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 427.50| 3.01 | 3.06|
+------+------+------+---+-------+--------+--------+-------------+
|MD 183|613352|912824|-63| 171 | 65.30| 0.85 | 13.73 (*)|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 151.05| 1.25 | 14.66 (*) |
+------+------+------+---+-------+--------+--------+-------------+
|MD 187|614226|913131|-56| 180 | 210.70| 1.10 | 6.54|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 421.50| 1.10 | 4.32 (*)|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 438.55| 0.50 | 9.35 (*)|
+------+------+------+---+-------+--------+--------+-------------+
|MD 188|613475|912843|-45| 185 | 53.80| 0.65 | 47.90|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 127.95| 1.00 | 3.89|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 160.80| 2.60 | 9.65|
+------+------+------+---+-------+--------+--------+-------------+
|MD 189|614532|913021|-70| 175 | 322.95| 1.00 | 3.37|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 394.00| 2.95 | 5.74|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 401.65| 2.15 | 15.41 |
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 436.40| 2.40 | 18.89|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 497.40| 0.50 | 11.59|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 671.00| 0.90 | 32.29 |
+------+------+------+---+-------+--------+--------+-------------+
|MD 190|613342|912848|-71| 196 | 29.80| 1.00 | 3.67|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 155.40| 1.30 | 11.03|
+------+------+------+---+-------+--------+--------+-------------+
|MD 191|613522|912806|-56| 187 | 149.80| 1.70 | 14.90|
+------+------+------+---+-------+--------+--------+-------------+
|MD 195|613331|912882|-70| 189 | 16.10| 1.00 | 6.71 (*)|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 211.00| 0.50 | 13.55|
+------+------+------+---+-------+--------+--------+-------------+
Table V. (cont'd) Drill hole results >3 g/t gold and >0.5 metres downhole width
for holes MD 165 to MD 216.
+--------+--------+--------+-----+-----+---------+------+------------+
| MD 196 | 614163 | 913110 | -50 | 175 | 99.20 | 0.90 | 4.03 |
+--------+--------+--------+-----+-----+---------+------+------------+
| | | | | | 434.10 | 1.50 | 5.78 |
+--------+--------+--------+-----+-----+---------+------+------------+
| | | | | | 485.10 | 3.20 | 11.37 |
+--------+--------+--------+-----+-----+---------+------+------------+
| | | | | | 492.85 | 0.20 | 3.76 |
+--------+--------+--------+-----+-----+---------+------+------------+
| | | | | | 520.00 | 0.20 | 3.62 |
+--------+--------+--------+-----+-----+---------+------+------------+
| | | | | | 539.75 | 2.00 | 103.36 |
+--------+--------+--------+-----+-----+---------+------+------------+
| | | | | | 544.90 | 1.65 | 62.36 |
+--------+--------+--------+-----+-----+---------+------+------------+
| MD 197 | 614226 | 913107 | -60 | 180 | 98.60 | 3.05 | 6.04 |
+--------+--------+--------+-----+-----+---------+------+------------+
| | | | | | 123.80 | 2.15 | 6.08 |
+--------+--------+--------+-----+-----+---------+------+------------+
| | | | | | 408.50 | 1.00 | 3.29 |
+--------+--------+--------+-----+-----+---------+------+------------+
| | | | | | 411.85 | 1.20 | 6.31 |
+--------+--------+--------+-----+-----+---------+------+------------+
| | | | | | 438.00 | 0.90 | 4.17 |
+--------+--------+--------+-----+-----+---------+------+------------+
| | | | | | 463.25 | 1.35 | 6.34 |
+--------+--------+--------+-----+-----+---------+------+------------+
| | | | | | 495.55 | 1.25 | 3.88 |
+--------+--------+--------+-----+-----+---------+------+------------+
| MD 199 | 614567 | 913137 | -58 | 158 | 401.40 | 1.55 | 8.27 (*) |
+--------+--------+--------+-----+-----+---------+------+------------+
| | | | | | 430.60 | 1.90 | 24.07 (*) |
+--------+--------+--------+-----+-----+---------+------+------------+
| | | | | | 551.05 | 0.50 | 26.54 (*) |
+--------+--------+--------+-----+-----+---------+------+------------+
| | | | | | 561.00 | 1.20 | 3.07 (*) |
+--------+--------+--------+-----+-----+---------+------+------------+
| | | | | | 566.00 | 1.50 | 6.63 (*) |
+--------+--------+--------+-----+-----+---------+------+------------+
| MD 200 | 614533 | 913020 | -45 | 175 | 515.80 | 1.70 | 41.69 (*) |
+--------+--------+--------+-----+-----+---------+------+------------+
| MD 201 | 613316 | 912930 | -75 | 127 | 43.35 | 2.10 | 5.15 (*) |
+--------+--------+--------+-----+-----+---------+------+------------+
| | | | | | 128.90 | 0.50 | 4.77 (*) |
+--------+--------+--------+-----+-----+---------+------+------------+
| MD 202 | 614157 | 913197 | -52 | 175 | 255.30 | 0.50 | 64.93 (*) |
+--------+--------+--------+-----+-----+---------+------+------------+
| MD 204 | 614294 | 913116 | -45 | 180 | 91.20 | 2.10 | 3.47 (*) |
+--------+--------+--------+-----+-----+---------+------+------------+
| MD 205 | 614536 | 913221 | -64 | 158 | 214.55 | 1.30 | 9.07 (*) |
+--------+--------+--------+-----+-----+---------+------+------------+
| | | | | | 474.85 | 0.60 | 4.66 (*) |
+--------+--------+--------+-----+-----+---------+------+------------+
| | | | | | 515.45 | 0.55 | 4.47 (*) |
+--------+--------+--------+-----+-----+---------+------+------------+
| MD 210 | 613478 | 912846 | -85 | 185 | 90.45 | 6.35 | 8.46 (*) |
+--------+--------+--------+-----+-----+---------+------+------------+
| | | | | | 234.55 | 0.85 | 18.90 (*) |
+--------+--------+--------+-----+-----+---------+------+------------+
| | | | | | 240.40 | 2.45 | 3.56 (*) |
+--------+--------+--------+-----+-----+---------+------+------------+
| | | | | | 313.10 | 1.70 | 3.87 (*) |
+--------+--------+--------+-----+-----+---------+------+------------+
| MD 211 | 614009 | 912469 | -50 | 192 | 134.25 | 1.25 | 8.90 (*) |
+--------+--------+--------+-----+-----+---------+------+------------+
| | | | | | 163.70 | 4.15 | 6.25 (*) |
+--------+--------+--------+-----+-----+---------+------+------------+
| | | | | | 197.95 | 1.20 | 3.02 (*) |
+--------+--------+--------+-----+-----+---------+------+------------+
| MD 213 | 613320 | 912924 | -80 | 180 | 58.80 | 2.25 | 3.06 (*) |
+--------+--------+--------+-----+-----+---------+------+------------+
| | | | | | 72.55 | 1.15 | 3.53 (*) |
+--------+--------+--------+-----+-----+---------+------+------------+
Notes:
i. Intersection widths are downhole drill widths not true widths;
ii. Assays denoted (*) are Philsaga assays, all others are by McPhar
Geoservices Inc in Manila; and
iii. Grid coordinates based on the Philippine Reference System 92.
Drilling is continuing along and across strike at the Co-O Mine using six
surface diamond drill rigs with the aim of increasing confidence levels in some
areas and identifying additional mineralisation that can be developed for
production.
REGIONAL DRILLING
Up to three surface rigs are testing new veins around the Co-O Mine as shown on
Figure 6 (please see the link at the end of this announcement). The aim of this
drilling is to extend the vein system so that additional production scenarios
can be considered through replicating mining infrastructure.
The Co-O vein system outcrops at surface on the western side of the Oriental
Fault, where it was first discovered. The veins at surface rarely exceed 0.5
metres width and generally assay around 1 to 5 g/t gold (with possibly some
supergene enrichment). Gold values started to increase significantly
approximately 80 metres below surface.
Up to the announcement on 9 December 2009, 16 drill holes (EXP 1 to 16) had been
completed. Results are available for EXP 1 to 12 (Table VI) where strongly
anomalous values have been obtained from a number of individual samples in
excess of 0.5 g/t gold and up to 5.13 g/t gold. These mineralised structures
will be assessed for further follow-up either along strike or at depth.
Table VI. Drill hole results >0.5 g/t gold for holes EXP 1 to 12.
+------+------+------+---+-------+--------+--------+-------------+
| | | |Dip|Azimuth| From | Width |Grade (uncut)|
| Hole | East |North | | | | | |
| | | |( °)| ( °) |(metres)|(metres)| (g/t gold) |
+------+------+------+---+-------+--------+--------+-------------+
|EXP 2 |613792|912724|-63| 130| 24.50| 2.00| 1.39 (*)|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 62.55| 1.35| 1.72 (*)|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | Incl. | 63.55| 0.35| 5.13 (*)|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 179.30| 1.00| 1.60 (*)|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 185.30| 1.00| 0.65 (*)|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 190.30| 0.70| 0.71 (*)|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 416.60| 1.00| 0.58 (*)|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 446.70| 1.00| 0.53 (*)|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 452.00| 1.00| 0.79 (*)|
+------+------+------+---+-------+--------+--------+-------------+
|EXP 3 |615733|911967|-60| 175| 232.00| 1.00| 0.71 (*)|
+------+------+------+---+-------+--------+--------+-------------+
|EXP 10|614880|913266|-70| 158| 583.30| 1.00| 0.55 (*)|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 636.15| 0.35| 2.20 (*)|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 659.60| 1.00| 0.65 (*)|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 671.45| 1.45| 0.77 (*)|
+------+------+------+---+-------+--------+--------+-------------+
|EXP 12|614961|913050|-47| 162| 782.90| 0.70| 0.76 (*)|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 783.75| 0.65| 0.72 (*)|
+------+------+------+---+-------+--------+--------+-------------+
| | | | | | 785.35| 0.55| 0.85 (*)|
+------+------+------+---+-------+--------+--------+-------------+
Notes:
i. Assays denoted (*) are Philsaga assays;
ii. Grid coordinates based on the Philippine Reference System 92;
iii. Assays awaited for EXP 13 to 16; and
iv. Intersections widths are downhole drill widths not true widths.
LINGIG COPPER PROJECT
Background
The Lingig prospect is covered by a Mines Operating Agreement ("MOA") over MPSA
application number APSA 024-XIII comprising two parcels situated to the north
and to the east (the Lingig copper prospect) of the Co-O Mine and millsite as
shown on Figures 1 and 2 (please see the link at the end of this announcement).
Figure 7 (please see the link at the end of this announcement) shows the current
interpretation of the regional geology with drill hole locations and a summary
of results. Table VII contains drill hole results obtained to date (including
results from the announcement of 17 March 2009). Figures 8 and 9 (please see the
link at the end of this announcement) show selected cross-sections. Additional
background information is contained in announcements dated 13 November 2007 and
17 March 2008 and the December 2007 quarterly report.
The 17 March 2009 announcement reported copper mineralisation contained within
an extensive east dipping 200 to 300 metre thick thrust zone. The thrust
footwall is an un-mineralised medium-grained biotite-hornblende quartz diorite
which intruded the basaltic sequence (numerous basalt xenoliths are present near
the diorite contact in both core and in outcrop). The 200 to 300 metre thick
thrust zone is mineralised in some sections with disseminated and hairline
veined chalcopyrite and minor bornite, with widespread epidote alteration,
magnetite, pyrite, local shearing, and carbonate veining. A 'quartz diorite
sill' immediately above the thrust contact is mineralised with chalcopyrite as
disseminations and veining and bornite, with common quartz veins up to two
centimetre thick hosting centre-line pyrite, chalcopyrite, and bornite. The
"quartz diorite sill' mineralisation is accompanied by magnetite disseminations
and veining.
The continuing drilling programme is designed to test the lateral extent of the
thrust contact and its associated copper mineralisation. Interpretations of
results to date indicate that the geology is structurally complex, with a
predominance of NE, NW and ENE trending structures. Some of these structures may
be controlling mineralisation, whilst some appear to be overprinting and
possibly remobilising the original copper mineralisation. Within the shear
corridors the veining and alteration destroy the primary magnetite in the
basaltic units.
The drill results at the Northern Discovery Area highlight two zones of
significant copper mineralisation as shown on Figure 7 (please see the link at
the end of this announcement). One is as previously reported (Zone 1) with a
second zone located approximately 400 metres to the south (Zone 2).
Drilling
Since the announcement on 17 March, 2009, the Company has drilled approximately
6,400 metres in seventeen angled holes using three rigs. All holes were cored
from surface. Drilling difficulties were experienced in LIN 9, which was
abandoned and twinned by LIN 10. Whilst assay results are still awaited for
holes LIN 21 to LIN 25, all other holes have been sampled and assays returned.
Only minor intervals of interest in LIN 12 were sampled.
Holes LIN 11, LIN 12 (re-drilled as LIN 13), and LIN 15 were drilled on the
large complex to the south. All other holes were drilled in the northern area
around the 1974 discovery hole JDH 1.
NORTHERN DISCOVERY AREA
Zone 1 Thrust-hosted mineralisation
The recent drilling has confirmed the continuation of the copper mineralised
'quartz diorite sill' above the thrust contact (Fig. 8 (please see the link at
the end of this announcement)), with the 'sill' dipping both to the north and to
the east at moderate angles (LIN 2 to LIN 6 and LIN 2 to LIN 19 respectively).
Further down dip however, the 'sill' diverges from the thrust contact, and the
contained copper grades are considerably reduced.
An alternative interpretation of the 'quartz diorite sill' is that it represents
a zone of carbonate, sericite and pyrite alteration that produces rounded white
'spots' as wall rock alteration around fractures and veins. The alteration is
destructive to primary rock textures, and produces a porphyritic to slightly
dioritic textured rock in appearance. What has been previously identified as a
'diorite sill' may alternatively represent a highly altered zone overprinting a
protolith host of dolerite, minor quartz diorite, or andesite porphyry.
The variably copper mineralised basaltic units above the altered 'sill', which
are characterised by local shearing, epidote alteration, and pyrite and
chalcopyrite veining with disseminated magnetite, become less altered and copper
mineralised further away and down dip from LIN 2 and LIN 3. The pyrite occurs
both as part of the mineralisation and as a sulphide halo around the
mineralisation. The orientation of the pyrite halo suggests influence by both NW
and NE trending structures.
The significance of the re-interpretation of the 'diorite sill' and its
associated mineralisation is that the copper mineralisation is not necessarily
then confined to the thrusted zone above the thrust contact. The enriched
chalcopyrite + bornite + pyrite + magnetite mineralisation and alteration around
LIN 2 and LIN 3 may be attributed to a concentration of porphyry style
mineralisation focused within a NE trending structural corridor. Under this
interpretation, the mineralisation would dip steeply to the north and or
northwest.
Zone 2 Porphyry-associated mineralisation
Zone 2 is located approximately 400 metres south of Zone 1, separated by a hill
of strongly pyrite veined and epidote altered basalt. Zone 2 is characterised by
three styles of mineralisation. Figure 9 (please see the link at the end of this
announcement) shows the cross-section for this zone.
The first style is similar to that hosted by the basaltic units above the
'diorite sill' in LIN 2 (Zone 1), being variably sheared basalt hosting
chalcopyrite with trace bornite and weak magnetite mineralisation within a
pyrite and pyrite + carbonate halo. This mineralisation is interpreted as
representing a zone of up-dip fluid migration, from either the underlying
mineralised intrusive breccias or the mineralised "diorite sill".
The second style is disseminated chalcopyrite hosted by a medium-grained quartz
diorite which has a distinct lack of sulphidic quartz veins, and is relatively
non-magnetic. The quartz diorite is characterised by common small golf ball
sized mafic xenoliths and fine-grained pale brown retrograde biotite. Clots of
remnant chlorite rimming chalcopyrite grains are noted within the pale brown
biotite alteration. The mineralisation is considered to be primary and related
to the biotite alteration, and has a sill-like orientation beneath the regional
thrust contact. The sill is interpreted to pinch out to the north, but remain
open to the east and south. Observations from LIN 20 suggest that at least part
of the diorite hosted disseminated copper mineralisation may have been truncated
by the overlying thrust contact. The dolerite immediately above the contact is
generally not mineralised. A halo of pyrite alteration occurs in the hanging
wall of the thrust contact.
The third style is hosted by polylithic intrusive breccias. Variably sized
clasts to 40 centimetres of quartz diorite, basalt and minor dolerite host up
disseminated fine-grained chalcopyrite in both the matrix and in some clasts.
The chalcopyrite is associated with secondary pale brown biotite, which is noted
in both the matrix and in some of the breccia clasts. A distinct lack of
mineralised quartz veining and limited magnetite characterise the breccia. The
breccia appears to be blind, probably not reaching the surface, and is enveloped
by a weak pyrite halo.
The chalcopyrite mineralised, pale brown biotite-altered diorite appears to
pinch to the north, but may widen to the south, suggesting that it is open to
the east (down dip), south, and vertically (within intrusive breccias).
QUARTZ DACITE PORPHYRY COMPLEX
Interpretations suggest that the complex is a flow of dacitic composition
underlain by flat-lying to low angle amygdaloidal basalt and basalt flows with
flow breccias tops. The units have been strongly sheared with strongly developed
wide spread zones of clay + pyrite +/- minor copper and lead sulphides +
variable silica alteration. Surficial weathering processes have enriched gold in
near surface zones as indicated by previously reported anomalous rock chip
values. Three holes drilled into selected sites within the complex intersected
only minor copper mineralisation (LIN 11, LIN 12 re-drilled as LIN 13, and LIN
15).
Links to the Zone 1 and Zone 2 mineralised systems to the north are unclear.
Outcropping copper minerals with anomalous rock chip values to 1000 ppm copper
occur in east-trending drainages immediately south of the Silver Belt Prospect
indicate that the potential for the altered dacitic complex area to host a
larger copper mineralised system remains.
Work Programme
There are currently three drill rigs in operation at the project which will
continue to test the evolving geological models and extensions to the
mineralised zones.
Table VII. Summary of all Lingig drilling results (LIN holes) and relevant 1974
drilling results
(JDH holes) for intersections >10 metres wide (including sub-grade material up
to 10 metres wide).
+------+-------+------+-------+---+---------------------------------------+
| | | | | | Cut-off 0.1% copper |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
| | | | | | From | To | Width |Grade |Gold |
|Hole |East |North |Azimuth|Dip| | | | | |
| | | | | |(metres)|(metres)|(metres)|(% Cu)|(g/t)|
+------+-------+------+-------+---+--------+--------+--------+------+-----+
| | | | | | 71.00| 196.10| 125.10| 0.26 |0.03 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
+------+-------+------+-------+---+--------+--------+--------+------+-----+
|LIN 2 |652075 |896844| 0 |-90| 2.00| 269.30| 267.30| 0.62 |0.06 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
+------+-------+------+-------+---+--------+--------+--------+------+-----+
+------+-------+------+-------+---+--------+--------+--------+------+-----+
+------+-------+------+-------+---+--------+--------+--------+------+-----+
|LIN 3 |652075 |896844| 180 |-60| 0.00| 224.00| 224.00| 0.77 |0.11 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
+------+-------+------+-------+---+--------+--------+--------+------+-----+
+------+-------+------+-------+---+--------+--------+--------+------+-----+
+------+-------+------+-------+---+--------+--------+--------+------+-----+
+------+-------+------+-------+---+--------+--------+--------+------+-----+
|LIN 5 |651994 |897150| 0 |-90| 389.40| 408.70| 19.30| 0.10 |0.01 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
|LIN 6 |651994 |897150| 166 |-62| 94.10| 114.10| 20.00| 0.13 |0.01 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
| | | | | | 280.40| 294.40| 14.00| 0.14 |0.01 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
| | | | | | 362.20| 421.60| 59.40| 0.31 |0.02 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
|JDH 1 |652073 |896908| 0 |-90| 52.00| 250.00| 198.00| 0.34 |0.01 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
+------+-------+------+-------+---+--------+--------+--------+------+-----+
+------+-------+------+-------+---+--------+--------+--------+------+-----+
|JDH 3 |651865 |895926| 0 |-90| 12.00| 100.00| 88.00| 0.14 |0.00 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
|JDH 5 |651828 |895648| 0 |-90| 18.00| 100.00| 82.00| 0.18 |0.00 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
| | | | | | 224.00| 242.00| 18.00| 0.15 |0.00 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
|LIN 10|652272 |896565| 270 |-60| 175.75| 212.30| 36.55| 0.12 |0.07 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
|LIN 13|651466.|894756| 180 |-50| 3.00| 212.10| 209.10| 0.25 |0.07 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
| | | | | | 232.10| 242.10| 10.00| 0.11 |0.01 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
|LIN 17|652469 |896366| 270 |-60| 144.75| 170.70| 25.95| 0.33 |0.03 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
| | | | | | 230.80| 275.30| 44.50| 0.34 |0.09 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
|LIN 19|652236 |896845| 242 |-60| 148.10| 307.80| 159.70| 0.40 |0.04 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
+------+-------+------+-------+---+--------+--------+--------+------+-----+
+------+-------+------+-------+---+--------+--------+--------+------+-----+
|LIN 20|652681 |896364| 270 |-60| 280.10| 318.10| 38.00| 0.20 |0.02 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
Notes: Assaying undertaken by McPhar Geoservices in Manila using:
i. Gold by fire assay on 30 g samples with AAS finish.
ii. Cu - by AAS following concentrated HCI and HCI/HNO3/HCIO4 leach in latter
stages on 1 g sample.
Table VII. (cont'd )Summary of all Lingig drilling results (LIN holes) and
relevant 1974 drilling results
(JDH holes) for intersections >10 metres wide (including sub-grade material up
to 10 metres wide).
+------+-------+------+-------+---+---------------------------------------+
| | | | | | Cut-off 0.3% copper |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
| | | | | | From | To | Width |Grade |Gold |
|Hole |East |North |Azimuth|Dip| | | | | |
| | | | | |(metres)|(metres)|(metres)|(% Cu)|(g/t)|
+------+-------+------+-------+---+--------+--------+--------+------+-----+
| | | | | | 118.50| 153.50| 35.00| 0.32 |0.02 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
| | | | | | 161.50| 196.10| 34.60| 0.35 |0.04 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
|LIN 2 |652075 |896844| 0 |-90| 26.00| 240.65| 214.65| 0.72 |0.07 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
| | | | | |including |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
| | | | | | 132.00| 142.65| 10.65| 1.00 |0.27 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
| | | | | | 172.00| 240.65| 68.65| 1.03 |0.08 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
|LIN 3 |652075 |896844| 180 |-60| 10.00| 222.00| 212.00| 0.80 |0.07 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
| | | | | |including |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
| | | | | | 68.00| 146.00| 78.00| 1.16 |0.21 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
| | | | | | 180.00| 190.00| 10.00| 1.02 |0.06 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
| | | | | | 206.00| 218.00| 12.00| 0.98 |0.20 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
|LIN 5 |651994 |897150| 0 |-90| | | | | |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
|LIN 6 |651994 |897150| 166 |-62| 364.20| 400.20| 36.00| 0.37 |0.03 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
+------+-------+------+-------+---+--------+--------+--------+------+-----+
+------+-------+------+-------+---+--------+--------+--------+------+-----+
|JDH 1 |652073 |896908| 0 |-90| 100.00| 112.00| 12.00| 0.43 |0.00 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
| | | | | | 134.00| 146.00| 12.00| 0.40 |0.00 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
| | | | | | 200.00| 250.00| 50.00| 0.67 |0.04 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
|JDH 3 |651865 |895926| 0 |-90| | | | | |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
|JDH 5 |651828 |895648| 0 |-90| | | | | |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
+------+-------+------+-------+---+--------+--------+--------+------+-----+
|LIN 10|652272 |896565| 270 |-60| | | | | |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
|LIN 13|651466.|894756| 180 |-50| 27.95| 83.85| 55.90| 0.44 |0.10 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
| | | | | | 94;60| 124.55| 29.95| 0.36 |0.03 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
|LIN 17|652469 |896366| 270 |-60| 150.70| 170.70| 20.00| 0.37 |0.03 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
| | | | | | 234.80| 273.30| 38.50| 0.37 |0.10 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
|LIN 19|652236 |896845| 242 |-60| 206.10| 284.10| 78.00| 0.66 |0.06 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
| | | | | |including |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
| | | | | | 260.10| 278.10| 18.00| 1.23 |0.10 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
|LIN 20|652681 |896364| 270 |-60| 282.10| 294.10| 12.00| 0.36 |0.05 |
+------+-------+------+-------+---+--------+--------+--------+------+-----+
Notes: Assaying undertaken by McPhar Geoservices in Manila using:
i. Gold by fire assay on 30 g samples with AAS finish.
ii. Cu - by AAS following concentrated HCI and HCI/HNO3/HCIO4 leach in latter
stages on 1 g sample.
TAMBIS-BAROBO AREA
Background
The Tambis project, currently comprising the Bananghilig Gold Deposit and the
Kamarangan copper porphyry prospect, is operated under a Mining Agreement with
Philex Gold Philippines Inc. over Mineral Production Sharing Agreement ("MPSA")
application APSA-000022-XIII which covers 6,262 hectares.
In the 1980s and 1990s a large amount of diamond and reverse circulation
drilling totalling 29,477 metres in 344 holes was undertaken by various
explorers to investigate a large area of known mineralisation.
From 2005 to 2007, Philsaga undertook underground exploration through a 50 metre
deep shaft and development, adits, and underground and surface drilling
totalling 7,715.50 metres in 31 holes.
Figure 1 (please see the link at the end of this announcement) shows the
location of the Bananghilig Deposit and Figure 10 shows the surface geology.
Table VIII summarises some of the more significant drillhole intersections from
the Bananghilig drilling.
Table VIII. Summary of significant Bananghilig intersections
+---------+----+--------+-------+-----------+-----------+-----------+----------+
| | | | | | | | Gold |
|Hole |East| North |Dip ( °)|Azimuth ( °)| From | Length | (uncut) |
| | | | | | (metres) | (metres) | |
| | | | | | | |(g/t gold)|
+---------+----+-+------+-------+-----------+-----------+-----------+----------+
|DD34-3 |612486|945509| -45| 130| 0.00| 170.10|2.09 |
+---------+------+------+-------+-----------+-----------+-----------+----------+
|DD34 -46A|612515|945493| -45| 130| 0.00| 182.00|2.13 |
+---------+------+------+-------+-----------+-----------+-----------+----------+
|DDH-G1 |612541|945476| -80| 90| 0.00 | 116.50|3.96 |
+---------+------+------+-------+-----------+-----------+-----------+----------+
|DDH-G3 |612541|945476| -80| 30| 0.00| 108.81|2.03 |
+---------+------+------+-------+-----------+-----------+-----------+----------+
|RC38-35 |612680|945409| -60| 130| 0.00| 64.00|8.40 |
+---------+------+------+-------+-----------+-----------+-----------+----------+
|RC40-16 |612515|945493| -45| 130| 0.00 | 55.00|4.14 |
+---------+------+------+-------+-----------+-----------+-----------+----------+
|TDH 10 |612827|945226| -50| 135| 10.50| 106.00|1.60 |
+---------+------+------+-------+-----------+-----------+-----------+----------+
|TDH 11 |612808|945224| -55| 320| 0.00| 569.90|0.64 |
+---------+------+------+-------+-----------+-----------+-----------+----------+
|TDH 12 |612848|945259| -50| 327| 0.00| 137.80|0.94 |
+---------+------+------+-------+-----------+-----------+-----------+----------+
|TDH 18 |612765|945263| -45| 324| 0.00| 256.20|1.30 |
+---------+------+------+-------+-----------+-----------+-----------+----------+
|TUG 05 |612748|945247| -1| 153| 0.00| 205.90|2.42 |
+---------+------+------+-------+-----------+-----------+-----------+----------+
Notes:
ii. Holes pre-fixed TDH and TUG are Philsaga surface and underground diamond
drill holes
iii. All other holes pre-date Philsaga.
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 and more recent Philsaga drillhole data and announced on 12 August
2009.
Table IX summarises the resource at various cut-offs with 0.6 g/t gold being
taken as the base case resource estimate. The majority of the resource is
contained within a 0.2 g/t gold domain (Domain 1) which measures 850 metres east
to west and 550 metres north south, with the mineralisation defined to variable
depths of 100 to 150 metres due to drill hole density constraints. The
mineralisation is also open in all other directions. A smaller domain (Domain
2) to the northeast is approximately 375 metres long in a northeasterly
direction, approximately 100 metres wide and open beyond 75 metres depth and has
increasing grades towards the northeast.
Table IX. Resource estimate as at August 2009
+--------------------+------------+----------+---------+
| Cut-off (g/t gold) | tonnes | g/t gold | ounces |
+--------------------+------------+----------+---------+
| 0.50 | 20,000,000 | 1.1 | 730,000 |
+--------------------+------------+----------+---------+
| 0.60 | 15,000,000 | 1.3 | 650,000 |
+--------------------+------------+----------+---------+
| 0.70 | 12,000,000 | 1.5 | 580,000 |
+--------------------+------------+----------+---------+
| 0.80 | 10,000,000 | 1.7 | 530,000 |
+--------------------+------------+----------+---------+
| 0.90 | 8,000,000 | 1.9 | 480,000 |
+--------------------+------------+----------+---------+
| 1.00 | 7,000,000 | 2.1 | 440,000 |
+--------------------+------------+----------+---------+
BANANGHILIG DEPOSIT
Regional Geology
The Bananghilig Gold Deposit is located on the northern edge of a large
aero-magnetically defined alteration zone measuring approximately 9.5 kilometres
by 7.3 kilometres and which also contains the Kamarangan copper porphyry target.
The Tambis District is generally underlain by fine to coarse-grained andesitic
and dacitic flows of probable pre-Tertiary age that constitute the basement
rocks. Locally, the basement rocks show agglomeratic features and in places are
cut by andesite to dacite porphyry dykes and bodies of hydrothermal breccias of
various shapes and sizes.
The southeastern part of the Tambis District is covered by a younger bedded
sedimentary formation comprising basal mudstone, sandy clastics and agglomerates
with massive white limestone to approximately 60 metres thick as the uppermost
member. The limestone bounds the Bananghilig area along the southeast and
extends and possibly dips to the southeast.
Structurally the Bananghilig Deposit is located near the intersection of the
Barobo Fault (parallel to the Philippine Rift Fault) and the Lianga Bay Fault
system.
Local Geology and Mineralisation
The Bananghilig Deposit is located partly within an elliptical-shaped diatreme
breccia body measuring approximately 1,000 metres long and 750 metres wide
within a larger interpreted caldera measuring approximately 10 kilometres by 6
kilometres.
The diatreme breccia is open to the south beneath the younger massive white
limestone rocks.
The gold mineralisation styles in the diatreme are generally associated with
pyrite and sphalerite along and around vein-like zones, in fractures and/or
breccia in-fill in milled/ fluidised muddy matrix breccia bodies and coarsely
brecciated/fractured andesitic-dacitic wallrock. The mineralisation is also
contained in intensely altered coarse-grained porphyritic (colloquially "peanut
brittle") andesitic intrusive rocks located mainly on the northern margin of the
diatreme breccia.
Widespread silica-clay-sericite-pyrite hydrothermal alteration affects the
volcanic wallrocks, the various breccia bodies and the hypabbyssal intrusives
associated with them. The alteration assemblage typifies that found in advanced
argillic alteration systems.
Rock hardness
Observations from the underground exploration activities conducted by the
Company, and observations from recent drilling, both indicate that the deposit
is likely to be "free dig" to well beyond 50 metres from surface. The softness
of the ore is due to the ubiquitous argillic alteration. Further work is
required to ascertain the extent of these favourable characteristics.
Future work
Future work at Bananghilig will involve:
* Extensional drilling to increase the deposit size and determine its
boundaries,
* Infill drilling to upgrade the resource categories, extend and define higher
grade zones,
* Detailed metallurgical studies.
* Detailed geotechnical studies, and
* Preliminary engineering studies.
MINERALISATION POTENTIAL - BAROBO FAULT CORRIDOR
Figure 11 (please see the link at the end of this announcement) shows the
regional structure and geology highlighting the mineralisation potential in
favourable limestone and calcareous clastic rocks along the Barobo Fault
Corridor. Mineralisation has been located in numerous outcrops and in drill
holes which are summarised in Table IX. The mineralisation located to date is
generally associated with silica and sphalerite-galena replacement of the host
rocks.
The calcareous sequence along the Barobo Fault Corridor is the same sequence
that has been extensively skarned and mineralised at the Kamarangan copper
porphyry prospect. This sequence is interpreted as the oldest calcareous
sequence known to date in the district and may be up to 1,600 metres thick.
The sequence is regarded as favourable for hosting large disseminated bodies of
gold mineralisation.
Table IX summarises some of the more significant drill hole intersections from
scout drilling (four holes at Guinhalinan, seven holes at Saguilsuilan and six
holes at Alikway). The focus of this scout drilling was on potential high grade
mineralisation, not potentially open-pittable targets. All show that gold
mineralisation is contained with this calcareous sequence. It should be noted,
as also shown in soil sampling on Figure 11 (please see the link at the end of
this announcement), that zinc is commonly associated with gold in this
environment
Table IX. Summary of scout drilling on Barobo Corridor limestone hosted
prospects
+-----------+------+------+---+-------+-----------+--------+----------+--------+
| | | |Dip|Azimuth| | Length | Gold | Zinc |
|Hole | East |North | | | From | | (uncut) | |
| | | |( °)| ( °) | (metres) |(metres)| | (%) |
| | | | | | | |(g/t gold)| |
+-----------+------+------+---+-------+-----------+--------+----------+--------+
|Guinhalinan| | | | | | | | |
+-----------+------+------+---+-------+-----------+--------+----------+--------+
|DGN 002 |615640|936325|-55| 315| 22.60| 7.30|2.72 |0.62 |
+-----------+------+------+---+-------+-----------+--------+----------+--------+
|DGN 003 |615639|936323|-50| 275| 27.55| 8.15|1.30 |0.27 |
+-----------+------+------+---+-------+-----------+--------+----------+--------+
|DGN 004 |615593|936377|-45| 140| 15.40| 6.00|0.67 |0.02 |
+-----------+------+------+---+-------+-----------+--------+----------+--------+
| | | | | | 27.40| 6.70|2.08 |0.38 |
+-----------+------+------+---+-------+-----------+--------+----------+--------+
| | | | | | 41.10| 17.60|0.81 |0.05 |
+-----------+------+------+---+-------+-----------+--------+----------+--------+
|Saguilsilan| | | | | | | | |
+-----------+------+------+---+-------+-----------+--------+----------+--------+
|SAG 006 |613277|939478|-45| 230| 36.60| 24.00|0.52 |No assay|
+-----------+------+------+---+-------+-----------+--------+----------+--------+
|Alikway | | | | | | | | |
+-----------+------+------+---+-------+-----------+--------+----------+--------+
|ALK 001 |616646|934544|-50| 180| 116.40| 1.90|21.20 |0.85 |
+-----------+------+------+---+-------+-----------+--------+----------+--------+
ANOLING
The Mines Operating Agreement ("MOA") with Alcorn Gold Resources Inc. covers
Mining Production Sharing Agreement ("MPSA") application number 039-XIII
situated approximately 8 kilometres north from the millsite as shown on Figure
2 (please see the link at the end of this announcement). Processing of the
Anoling MPSA is in progress. Drilling will recommence when the MPSA has been
granted.
SAUGON
The Saugon prospect is situated approximately 10 kilometres south of the Co-O
Gold Mine and 28 kilometres by road from the Co-O Plant. Work commenced in early
2003 on the First Hit Vein which has been followed intermittently at the surface
over 600 metres and which has been explored underground via a 40 metre deep
winze, level development and drilling of 31 diamond drill holes.
Re-mapping, trenching and re-logging of core are progressing in preparation for
drilling during 2010.
BUNAWAN JOINT VENTURE
The Company, through its Philippines operating company, Philsaga Mining
Corporation ("Philsaga"), signed a joint venture agreement ("JVA") with Bunawan
Mining Corporation ("Bunawan") on 23 August 2007, the Philippine operating
company of ASX listed Sierra Mining Limited ("Sierra"), whereby Philsaga will
earn a 70% joint venture interest in Exploration Permit application ("EPA")
000037-XIII and Mineral Production Sharing Agreement application ("APSA")
000003-XIII (together the "Bunawan JV").
Following the announcement dated 17 June 2009 of Bunawan's Australian listed
parent company, Sierra Mining Limited, advising that EPA 000037-XIII had been
denied on "the basis of certification of non-consent issued by the National
Commission of Indigenous People", the Company has withdrawn the Demand Letter
for Arbitration from the Philippine Dispute Resolution Centre Inc.
FINANCIALS
The Company will be presenting US$'s as the reporting currency in all its
financial reports effective 1 July 2009.
As at 31 December 2009, the Company which is debt free, had a consolidated cash
balance of US$35.5 million (Dec 2008: US$4.0 million).
During the half-year:
* The Company received proceeds of US$41.0 million from the sale of its gold
and US$0.3 million from interest income (Dec 2008 half-year gold sales:
US$15.7 million);
* Depreciation and amortisation increased to US$3.2 million, compared with
US$1.6 million in the December half of 2008, due to increased gold
production;
* US$9.2 million outlay on exploration expenditure, including US$6.1 million
on the Co-O Mine (Dec 2008 half-year: US$5.2 million, including US$3.1
million for the Co-O Mine). The exploration budget for the 2009/10 fiscal
year has been revised upwards to US$18 million;
* US$4.0 million was spent on capital works associated with the mine and mill
expansion (Dec 2008 half-year: US$1.9 million); and
* Incurred US$4.2 million on mine development costs (Dec 2008 half-year:
US$4.4 million).
CORPORATE
The Company officially commenced trading on the Toronto Stock Exchange on 27
November 2009, under the trading code of MLL.
JORC COMPLIANCE - CONSENT OF COMPETENT PERSONS
Medusa Mining Limited
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" 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.
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
"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 Zammit 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
<http://www.sedar.com/> in November 2009 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.
Crosscut Consulting
Information in this report relating to Ore Reserves is based on information
compiled by Declan Franzmann, B Eng (Mining), MAusIMM. Mr Franzmann is a
full-time employee of Crosscut Consulting. Mr Franzman has sufficient experience
which is relevant to the style of mineralisation and type of deposit under
consideration and to the activity which they are undertaking to qualify as
Competent Persons 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" as defined in "National Instrument 43-101" of the Canadian
Securities Administrators. Mr Franzmann 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
<http://www.sedar.com/> in November 2009 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.
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
for the half-year ended 31 December 2009
+----------------------------------------------------++------------------------+
| || Consolidated Group |
+----------------------------------------------------++------------+-----------+
| ||31 Dec 2009 |31 Dec 2008|
+----------------------------------------------------++------------+-----------+
| || US$ | US$ |
+----------------------------------------------------++------------+-----------+
|Revenue || 41,324,464| 15,780,970|
+----------------------------------------------------++------------+-----------+
|Other income || 1,154| -|
+----------------------------------------------------++------------+-----------+
|Cost of sales ||(10,475,750)|(5,968,850)|
+----------------------------------------------------++------------+-----------+
|Administration expenses || (1,444,677)|(1,483,251)|
+----------------------------------------------------++------------+-----------+
|Other expenses || (1,123,704)| (390,782)|
+----------------------------------------------------++------------+-----------+
|Profit before income tax expense || 28,281,487| 7,983,087|
+----------------------------------------------------++------------+-----------+
|Income tax benefit || 51,859| 1,440,715|
+----------------------------------------------------++------------+-----------+
|Profit for the period after income tax expense || 28,333,346| 9,423,802|
+----------------------------------------------------++------------+-----------+
|Other comprehensive income: || | |
+----------------------------------------------------++------------+-----------+
|Exchange differences on translation of foreign || 3,963,420|(2,859,492)|
|operations || | |
+----------------------------------------------------++------------+-----------+
|Total comprehensive income || 32,296,766| 6,564,310|
+----------------------------------------------------++------------+-----------+
|Overall operations: || | |
+----------------------------------------------------++------------+-----------+
|Basic earnings per share || $0.168| $0.065|
+----------------------------------------------------++------------+-----------+
|Diluted earnings per share || $0.167| $0.065|
+----------------------------------------------------++------------+-----------+
The accompanying notes form part of these financial statements.
CONDENSED STATEMENT OF FINANCIAL POSITION
as at 31 December 2009
+-------------------------------------------------+----+-----------------------+
| | | Consolidated Group |
+-------------------------------------------------+----+-----------+-----------+
| | |31 Dec 2009|30 Jun 2009|
+-------------------------------------------------+----+-----------+-----------+
| |Note| US$ | US$ |
+-------------------------------------------------+----+-----------+-----------+
|CURRENT ASSETS | | | |
+-------------------------------------------------+----+-----------+-----------+
|Cash & cash equivalents | | 35,528,493| 26,510,016|
+-------------------------------------------------+----+-----------+-----------+
|Trade & other receivables | | 8,282,092| 5,005,535|
+-------------------------------------------------+----+-----------+-----------+
|Inventories | | 2,125,273| 1,163,837|
+-------------------------------------------------+----+-----------+-----------+
|Other current assets | | 286,412| 128,439|
+-------------------------------------------------+----+-----------+-----------+
|Total Current Assets | | 46,222,270| 32,807,827|
+-------------------------------------------------+----+-----------+-----------+
|NON-CURRENT ASSETS | | | |
+-------------------------------------------------+----+-----------+-----------+
|Property, plant & equipment | | 33,106,216| 29,822,581|
+-------------------------------------------------+----+-----------+-----------+
|Exploration, evaluation and development | | 65,615,318| 52,722,143|
|expenditure | | | |
+-------------------------------------------------+----+-----------+-----------+
|Deferred tax assets | | 98,190| 69,204|
+-------------------------------------------------+----+-----------+-----------+
|Total Non-Current Assets | | 98,819,724| 82,613,928|
+-------------------------------------------------+----+-----------+-----------+
|TOTAL ASSETS | |145,041,994|115,421,755|
+-------------------------------------------------+----+-----------+-----------+
|CURRENT LIABILITIES | | | |
+-------------------------------------------------+----+-----------+-----------+
|Trade & other payables | | 5,244,603| 9,192,995|
+-------------------------------------------------+----+-----------+-----------+
|Total Current Liabilities | | 5,244,603| 9,192,995|
+-------------------------------------------------+----+-----------+-----------+
|NON-CURRENT LIABILITIES | | | |
+-------------------------------------------------+----+-----------+-----------+
|Deferred tax liability | | 316,842| 312,970|
+-------------------------------------------------+----+-----------+-----------+
|Total Non-Current Liabilities | | 316,842| 312,970|
+-------------------------------------------------+----+-----------+-----------+
|TOTAL LIABILITIES | | 5,561,445| 9,505,965|
+-------------------------------------------------+----+-----------+-----------+
|NET ASSETS | |139,480,549|105,915,790|
+-------------------------------------------------+----+-----------+-----------+
|EQUITY | | | |
+-------------------------------------------------+----+-----------+-----------+
|Issued capital | 5 | 70,862,818| 69,775,571|
+-------------------------------------------------+----+-----------+-----------+
|Reserves | | 8,454,555| 4,310,388|
+-------------------------------------------------+----+-----------+-----------+
|Retained profits | | 60,163,176| 31,829,831|
+-------------------------------------------------+----+-----------+-----------+
|TOTAL SHAREHOLDERS' EQUITY | |139,480,549|105,915,790|
+-------------------------------------------------+----+-----------+-----------+
The accompanying notes form part of these financial statements.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the half-year ended 31 December 2009
+---------------+------------+-------------+----------+------------+-----------+
| | | | Option | | |
| | | | Premium | | |
| | Share | Retained | Reserve | Foreign | |
| | Capital | Profits / | | Currency | |
| | |(Accumulated | (refer |Translation | |
| | Ordinary | Losses) | note 6) | Reserve | Total |
| | | | | | |
| | | | | | |
| | US$ | US$ | US$ | US$ | US$ |
+---------------+------------+-------------+----------+------------+-----------+
|Balance at | | | | | |
|01.07.2008 |51,999,073 | 3,322,896| 1,312,154|3,212,649 |59,846,772 |
+---------------+------------+-------------+----------+------------+-----------+
|Shares issued | | | | | |
|during the | | | | | |
|period |900,036 | -| -|- |900,036 |
+---------------+------------+-------------+----------+------------+-----------+
|Share options | | | | | |
|recognised | | | | | |
|during the | | | | | |
|period | | | | | |
| |- | -| 97,224|- |97,224 |
|in accordance | | | | | |
|with AASB 2 - | | | | | |
|share based | | | | | |
| | | | | | |
|payments | | | | | |
+---------------+------------+-------------+----------+------------+-----------+
|Comprehensive | | | | | |
|income for the |- | 9,423,801| -|(2,859,492) |6,564,309 |
|period | | | | | |
+---------------+------------+-------------+----------+------------+-----------+
|Sub-total |52,899,109 | 12,746,697| 1,409,378|353,157 |67,408,341 |
+---------------+------------+-------------+----------+------------+-----------+
|Dividends paid | | | | | |
|or provided for|- | -| -|- |- |
+---------------+------------+-------------+----------+------------+-----------+
|Balance at | | | | | |
|31.12.2008 |52,899,109 | 12,746,697| 1,409,378|353,157 |67,408,341 |
+---------------+------------+-------------+----------+------------+-----------+
|Balance at | | | | | |
|01.07.2009 |69,775,571 | 31,829,830| 1,577,231|2,733,157 |105,915,789|
+---------------+------------+-------------+----------+------------+-----------+
|Shares issued | | | | | |
|during the | | | | | |
|period |1,087,247 | -| -|- |1,087,247 |
+---------------+------------+-------------+----------+------------+-----------+
|Share options | | | | | |
|recognised | | | | | |
|during the | | | | | |
|period in | | | | | |
|accordance with| | | | | |
|AASB 2 - share | | | | | |
|based payments |- | -| 180,747|- |180,747 |
+---------------+------------+-------------+----------+------------+-----------+
|Comprehensive | | | | | |
|income for the |- | 28,333,346| -|3,963,420 |32,296,766 |
|period | | | | | |
+---------------+------------+-------------+----------+------------+-----------+
|Sub-total |70,862,818 | 60,163,176| 1,757,978|6,696,577 |139,480,549|
+---------------+------------+-------------+----------+------------+-----------+
|Dividends paid | | | | | |
|or provided for|- | -| -|- |- |
+---------------+------------+-------------+----------+------------+-----------+
|Balance at | | | | | |
|31.12.2009 |70,862,818 | 60,163,176| 1,757,978|6,696,577 |139,480,549|
+---------------+------------+-------------+----------+------------+-----------+
The accompanying notes form part of these financial statements.
CONDENSED CASH FLOW STATEMENT
for the half-year ended 31 December 2009
+--------------------------------------------------++-------------------------+
| || Consolidated Group |
+--------------------------------------------------++------------+------------+
| ||31 Dec 2009 |31 Dec 2008 |
+--------------------------------------------------++------------+------------+
| || US$ | US$ |
+--------------------------------------------------++------------+------------+
|CASH FLOWS FROM OPERATING ACTIVITIES || | |
+--------------------------------------------------++------------+------------+
|Receipts from customers || 41,043,043| 16,032,902|
+--------------------------------------------------++------------+------------+
|Payments to suppliers and employees ||(17,914,686)| (8,051,075)|
+--------------------------------------------------++------------+------------+
|Interest received || 282,575| 18,408|
+--------------------------------------------------++------------+------------+
|Net cash provided by operating activities || 23,410,932| 8,000,235|
+--------------------------------------------------++------------+------------+
|CASH FLOWS FROM INVESTING ACTIVITIES || | |
+--------------------------------------------------++------------+------------+
|Purchase of non-current assets || (4,077,871)| (1,917,403)|
+--------------------------------------------------++------------+------------+
|Payments for exploration expenditure and tenements|| (9,181,454)| (5,160,330)|
+--------------------------------------------------++------------+------------+
|Payments for development activities || (4,205,235)| (4,363,752)|
+--------------------------------------------------++------------+------------+
|Net cash (used in) investing activities ||(17,464,560)|(11,441,485)|
+--------------------------------------------------++------------+------------+
|CASH FLOWS FROM FINANCING ACTIVITIES || | |
+--------------------------------------------------++------------+------------+
|Proceeds from issue of shares || 1,087,247| 900,036|
+--------------------------------------------------++------------+------------+
|Net cash provided by financing activities || 1,087,247| 900,036|
+--------------------------------------------------++------------+------------+
|Net increase / (decrease) in cash held || 7,033,619| (2,541,214)|
+--------------------------------------------------++------------+------------+
|Cash at beginning of period || 26,510,016| 4,648,046|
+--------------------------------------------------++------------+------------+
|Exchange rate adjustments || 1,984,858| 1,855,530|
+--------------------------------------------------++------------+------------+
|Cash at end of period || 35,528,493| 3,962,362|
+--------------------------------------------------++------------+------------+
The accompanying notes form part of these financial statements.
CONDENSED NOTES TO THE FINANCIAL STATEMENTS
for the half-year ended 31 December 2009
Note 1: Basis of preparation
Medusa Mining Limited (the "Company") is a company domiciled in Australia.
The consolidated interim financial report of the Company as at and for the six
months ended 31 December 2009 comprises the Company and its subsidiaries
(together referred to as (the "Group") and the consolidated group's interests in
associates and jointly controlled entities.
The consolidated annual financial report of the consolidated group as at and for
the year ended 31 December 2009 is available on the company's website.
a. Statement of compliance
These general purpose financial statements for the interim half-year reporting
period ended 31 December 2009 have been prepared in accordance with requirements
of the Corporations Act 2001 and Australian Accounting Standards including AASB
134: Interim Financial Reporting. Compliance with Australian Accounting
Standards ensures that the financial statements and notes also comply with
International Financial Reporting Standards.
The consolidated interim financial report does not include all of the
information required for a full annual financial report, and should be read in
conjunction with the consolidated annual financial report of the Consolidated
Group as at and for the year ended 30 June 2009.
This consolidated interim financial report was approved by the Board of
Directors on 22 February 2009.
b. Significant accounting policies
The accounting policies applied by the Consolidated Group in this consolidated
interim financial report are the same as those applied by the Consolidated Group
in its consolidated financial report as at and for the year ended 30 June 2009.
c. Change in accounting policy
From 1 July 2009 the Company has adopted the following Standards for the
reporting periods beginning on or after 1 July 2009. Adoption of these standards
did not have any effect on the financial position or performance of the Company.
However, the adoption of AASB 8 has caused the Company to revise its segment
reporting. See note 4 for details of the reportable segments and applicable
accounting policies.
* AASB 8 Operating Segments
* AASB 101 Revised Presentation of Financial Statements
d. Change in functional and presentation currency
The functional currency for a company is the currency of the primary economic
environment in which the company operates. The presentation currency for a
company is the currency in which the company chooses to present its financial
report. Till June 2009, the presentation currency of the Group was Australian
dollars.
AASB 121, The Effects of Changes in Foreign Exchange Rates, suggests that a
primary factor in determining the functional currency of an entity is the
currency that mainly influences sales price for goods and services.
The Company's Gold sales, which are in US dollars, significantly outweigh all
the expenses of the Group. In order to better reflect the Company's and Group's
financial position and operations the Company has decided to change its
presentation currency for financial reporting to US dollars. The Company has
determined the date of transition of the presentation currency from Australian
dollars to US dollars as 1 July 2009.
In order to derive US dollar comparatives the Company has converted the
Statements of Financial Position at 30 June 2009 at US$/Philippine Peso of
48.369 for Philippine subsidiaries except MMPRC while the parent entity has been
converted at US$/A$ of 0.8931. The Statements of Comprehensive Income for the
year ended 30 June 2009 have been converted at an average rate of US$/Philippine
Peso 47.594 for Philippine subsidiaries except MMPRC and US$/A$ 0.8704 for the
Parent Entity.
Equity Balances have been maintained at historical exchange rates relating to
the date of transaction. As described in the above mentioned reasons management
have decided that Medusa Mineral Processing and Refining Corporation ("MMPRC"),
a 100% owned subsidiary of the Company, would change its functional and
presentation currency from Philippine Pesos to US dollars commencing 1 July
2009.
e. Estimates
The preparation of the interim financial report requires management to make
judgements, estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets and liabilities, income and expense.
Actual results may differ from these estimates.
In preparing this consolidated interim financial report, the significant
judgements made by management in applying the Consolidated Group's accounting
policies and the key sources of estimation uncertainty were the same as those
that applied to the consolidated financial report as at and for the year ended
30 June 2009.
Determination of Ore Reserves and remaining life
The Company estimates its ore reserves and mineral resources based on
information compiled by Competent Persons (as defined in accordance with the
Australian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves as revised December 2004 (the JORC code). Reserves determined in this
way are taken into account in the calculation of depreciation, amortisation,
impairment, deferred mining costs, rehabilitation and environmental expenditure.
In estimating the remaining life of the mine for the purpose of amortisation and
depreciation calculations, due regard is given, not only to the amount of
remaining recoverable gold ounces contained in proved and probable ore reserves,
but also to limitations which could arise from the potential for changes in
technology, demand, and other issues which are inherently difficult to estimate
over a lengthy time frame.
Where a change in estimated recoverable gold ounces contained in proved and
probable ore reserves is made, depreciation and amortisation is accounted for
prospectively.
The determination of ore reserves and remaining mine life affects the carrying
value of a number of the Consolidated Group's assets and liabilities including
deferred mining costs and the provision for rehabilitation.
f. Financial Risk Management
The Consolidated Group's financial risk management objectives and policies are
consistent with that disclosed in the consolidated financial report as at and
for the year ended 30 June 2009.
g. Exploration and evaluation expenditure
Exploration and evaluation expenditure incurred by or on behalf of the Group is
accumulated separately for each area of interest. Such expenditure comprises
direct costs and does not include general overheads or administrative
expenditure not having a specific nexus with a particular area of interest.
Exploration expenditure for each area of interest is carried forward as an asset
provided the rights to tenure of the area of interest are current and one of the
following conditions is met:
* exploration and evaluation expenditures are expected to be recouped through
successful development and exploitation of the area of interest, or
alternatively, by its sale; and
* exploration and evaluation activities in the area of interest have not at
the reporting date reached a stage which permits a reasonable assessment of
the existence or otherwise of economically recoverable reserves, and, active
and significant operations in, or in relation to, the area of interest are
continuing.
Exploration expenditure is written off when it fails to meet at least one of the
conditions outlined above or an area of interest is abandoned.
Exploration and evaluation assets are assessed for impairment when facts and
circumstances suggest that the carrying amount of an exploration and evaluation
asset may exceed its recoverable amount. When facts and circumstances suggest
that the carrying amount exceeds the recoverable amount the impairment loss will
be measured and disclosed in accordance with AASB 136 Impairment of Assets.
When a decision is made to develop an area of interest, all carried forward
exploration expenditure in relation to the area of interest is transferred to
development expenditure.
h. Development expenditure
Development expenditure represents the accumulated exploration, evaluation, land
and development expenditure incurred by or on behalf of the Group in relation to
areas of interest in which mining of a mineral resource has commenced.
When further development expenditure is incurred in respect of a mine property
after commencement of production, such expenditure is carried forward as part of
the mine property only when substantial future economic benefits are thereby
established, otherwise such expenditure is classified as part of the cost of
production. All horizontal development drives which include permanent rail and
associated infrastructure are capitalised.
Amortisation of costs is provided on the unit-of-production method with separate
calculations being made for each mineral resource. The unit-of-production basis
results in an amortisation charge proportional to the depletion of the estimated
recoverable reserves. In some circumstances, where conversion of resources into
reserves is expected, some elements of resources may be included. Development
and land expenditure still to be incurred in relation to the current reserves
are included in the amortisation calculation. Where the life of the assets are
shorter than the mine life their costs are amortised based on the useful life of
the assets.
The estimated recoverable reserves and life of the mine and the remaining useful
life of each class of asset is reassessed at least annually. Where there is a
change in the reserves/resources amortisation rates are correspondingly
adjusted.
CONDENSED NOTES TO THE FINANCIAL STATEMENTS
for the half-year ended 31 December 2009
+-----------------------------------------------------++-----------------------+
| || Consolidated Group |
+-----------------------------------------------------++-----------+-----------+
| ||31 Dec 2009|31 Dec 2008|
+-----------------------------------------------------++-----------+-----------+
| || US$ | US$ |
+-----------------------------------------------------++-----------+-----------+
|Note 2: Profit for the period || | |
+-----------------------------------------------------++-----------+-----------+
|The following revenue and expense items are relevant || | |
|in explaining the financial performance for the || | |
|interim period: || | |
+-----------------------------------------------------++-----------+-----------+
|Revenue items: || | |
+-----------------------------------------------------++-----------+-----------+
|Interest revenue || 282,575| 16,980|
+-----------------------------------------------------++-----------+-----------+
|Gold and silver sales || 41,041,889| 15,763,736|
+-----------------------------------------------------++-----------+-----------+
|Expense items: || | |
+-----------------------------------------------------++-----------+-----------+
|Depreciation || 1,391,108| 955,567|
+-----------------------------------------------------++-----------+-----------+
|Amortisation || 1,784,647| 620,158|
+-----------------------------------------------------++-----------+-----------+
|Employee benefits expense || 708,108| 438,676|
+-----------------------------------------------------++-----------+-----------+
|Recognition of share based payments || 180,747| 110,131|
+-----------------------------------------------------++-----------+-----------+
Note 3: Dividends
No dividend was declared or paid by the Company since the last annual
reporting date.
+------------------------------------------------------------------------------+
|Note 4: Segment Information |
| |
| |
|The Consolidated Group has identified its reportable operating segments based |
|on the internal reports that are reviewed and used by the Managing Director |
|(the chief operating decision maker) and his management team in assessing |
|performance and in determining the allocation of resources. |
| |
| |
|The Group segments are structured as Mine, Exploration and Other. Currently |
|the only operational mine is the Co-O mine. |
+---------------------+-----------+-----------+-----------+--------------------+
| | Mining |Exploration| Other | Total |
+---------------------+-----------+-----------+-----------+--------------------+
| | US$ | US$ | US$ | US$ |
+---------------------+-----------+-----------+-----------+--------------------+
|6 months to December | | | | |
|2009: | | | | |
+---------------------+-----------+-----------+-----------+--------------------+
|Segment revenue | 41,041,889| -| 283,729| 41,325,618|
+---------------------+-----------+-----------+-----------+--------------------+
|Segment result | 29,905,872| -|(1,572,526)| 28,333,346|
+---------------------+-----------+-----------+-----------+--------------------+
+---------------------+-----------+-----------+-----------+--------------------+
|Segment assets |114,619,835| 15,416,431| 15,005,728| 145,041,994|
+---------------------+-----------+-----------+-----------+--------------------+
|Segment liabilities | 4,694,065| 4,407| 862,972| 5,561,444|
+---------------------+-----------+-----------+-----------+--------------------+
|6 months to December | | | | |
|2008: | | | | |
+---------------------+-----------+-----------+-----------+--------------------+
|Segment revenue | 15,762,633| -| 18,337| 15,780,970|
+---------------------+-----------+-----------+-----------+--------------------+
|Segment result | 9,165,190| -| 258,612| 9,423,802|
+---------------------+-----------+-----------+-----------+--------------------+
+---------------------+-----------+-----------+-----------+--------------------+
|Segment assets | 89,240,312| 11,872,040| 14,309,403| 115,421,755|
+---------------------+-----------+-----------+-----------+--------------------+
|Segment liabilities | 9,041,314| 7,083| 457,568| 9,505,965|
+---------------------+-----------+-----------+-----------+--------------------+
CONDENSED NOTES TO THE FINANCIAL STATEMENTS
for the half-year ended 31 December 2009
+--------------------------+-----------------------------------------------+
| | Consolidated Group |
+--------------------------+-----------+-----------+-----------+-----------+
| |31 Dec 2009|30 Jun 2009|31 Dec 2009|30 Jun 2009|
+--------------------------+-----------+-----------+-----------+-----------+
| | (shares) | (shares) | (US$) | (US$) |
+--------------------------+-----------+-----------+-----------+-----------+
|Note 5: Issued Capital | | | | |
+--------------------------+-----------+-----------+-----------+-----------+
|Ordinary shares on issue |170,381,960|168,691,960| 70,862,818| 69,775,571|
+--------------------------+-----------+-----------+-----------+-----------+
+--------------------------+-----------+-----------+-----------+-----------+
|Opening balance |168,691,960|145,057,548| 69,775,571| 51,999,074|
+--------------------------+-----------+-----------+-----------+-----------+
|add - | | | | |
+--------------------------+-----------+-----------+-----------+-----------+
|Shares issued during the | 1,690,000| 23,634,412| 1,087,247| 17,776,497|
|period | | | | |
+--------------------------+-----------+-----------+-----------+-----------+
| |170,381,960|168,691,960| 70,862,818| 69,775,571|
+--------------------------+-----------+-----------+-----------+-----------+
|Movement in ordinary | | | | |
|shares during the | | | | |
|half-year: | | | | |
+--------------------------+-----------+-----------+-----------+-----------+
|- Balance at beginning of |168,691,960|145,057,548| 69,775,571| 51,999,074|
|the period | | | | |
+--------------------------+-----------+-----------+-----------+-----------+
|- Options converted to | | | | |
|ordinary shares @ | -| 250,000| -| 147,006|
|US$0.5880 each | | | | |
+--------------------------+-----------+-----------+-----------+-----------+
|- Options converted to | | | | |
|ordinary shares @ | -| 500,000| -| 376,695|
|US$0.7534 each | | | | |
+--------------------------+-----------+-----------+-----------+-----------+
|- Options converted to | | | | |
|ordinary shares @ | -| 500,000| -| 376,335|
|US$0.7527 each | | | | |
+--------------------------+-----------+-----------+-----------+-----------+
|- Options converted to | | | | |
|ordinary shares @ | -| 250,000| -| 235,656|
|US$0.9426 each | | | | |
+--------------------------+-----------+-----------+-----------+-----------+
|- Options converted to | | | | |
|ordinary shares @ US$0. | -| 1,750,000| -| 1,708,438|
|9763 each | | | | |
+--------------------------+-----------+-----------+-----------+-----------+
|- Shares issued @ | -| 20,300,000| -| 15,712,951|
|US$0.7740 each | | | | |
+--------------------------+-----------+-----------+-----------+-----------+
|- Shares issued @ | -| 84,412| -| 52,989|
|US$0.6277 each | | | | |
+--------------------------+-----------+-----------+-----------+-----------+
|- Options converted to | | | | |
|ordinary shares @ | 100,000| -| 103,637| -|
|US$1.0364 each | | | | |
+--------------------------+-----------+-----------+-----------+-----------+
|- Options converted to | | | | |
|ordinary shares @ | 50,000| -| 29,955| -|
|US$0.5991 each | | | | |
+--------------------------+-----------+-----------+-----------+-----------+
|- Options converted to | | | | |
|ordinary shares @ | 750,000| -| 496,430| -|
|US$0.6619 each | | | | |
+--------------------------+-----------+-----------+-----------+-----------+
|- Options converted to | | | | |
|ordinary shares @ | 190,000| -| 220,543| -|
|US$1.1608 each | | | | |
+--------------------------+-----------+-----------+-----------+-----------+
|- Options converted to | | | | |
|ordinary shares @ | 600,000| -| 236,682| -|
|US$0.3945 each | | | | |
+--------------------------+-----------+-----------+-----------+-----------+
|- Issue costs | -| -| -| (833,573)|
+--------------------------+-----------+-----------+-----------+-----------+
| |170,381,960|168,691,960| 70,862,818| 69,775,571|
+--------------------------+-----------+-----------+-----------+-----------+
The A$ issue price per share has been converted using the exchange rate
applicable on the date the funds were received and rounded to four decimal
places.
CONDENSED NOTES TO THE FINANCIAL STATEMENTS
for the half-year ended 31 December 2009
+------------------------------+-----------------------------------------------+
| | Consolidated Group |
+------------------------------+-----------+-----------+-----------+-----------+
| |31 Dec 2009|30 Jun 2009|31 Dec 2009|30 Jun 2009|
+------------------------------+-----------+-----------+-----------+-----------+
| | (options) | (options) | (US$) | (US$) |
+------------------------------+-----------+-----------+-----------+-----------+
|Note 6: Option Premium Reserve| | | | |
+------------------------------+-----------+-----------+-----------+-----------+
|Option Premium Reserve | 1,340,000| 3,030,000| 1,757,978| 1,577,231|
+------------------------------+-----------+-----------+-----------+-----------+
+------------------------------+-----------+-----------+-----------+-----------+
|Opening balance | 3,030,000| 6,431,446| 1,577,231| 1,312,154|
+------------------------------+-----------+-----------+-----------+-----------+
|less - | | | | |
+------------------------------+-----------+-----------+-----------+-----------+
|Options converted |(1,690,000)|(3,250,000)| -| -|
+------------------------------+-----------+-----------+-----------+-----------+
|Options cancelled | -|(1,151,446)| -| -|
+------------------------------+-----------+-----------+-----------+-----------+
|add - | | | | |
+------------------------------+-----------+-----------+-----------+-----------+
|Options issued - exercisable | -| 1,000,000| -| -|
|at US$0.6569 each | | | | |
+------------------------------+-----------+-----------+-----------+-----------+
|Share options recognised | | | | |
|during the period in | -| -| 180,747| 265,077|
|accordance with AASB 2 - share| | | | |
|based payments | | | | |
+------------------------------+-----------+-----------+-----------+-----------+
| | 1,340,000| 3,030,000| 1,757,978| 1,577,231|
+------------------------------+-----------+-----------+-----------+-----------+
Note 7: Contingent Liabilities
Under a Heads of Agreement ("HOA") between Sierra Mining Limited ("SML") and
Medusa signed in August 2007, Medusa had agreed to take a 9.9% placement in
Sierra of 4.85 million shares (at an issue price of A$0.25, totalling A$1.21
million) with 2.425 million unlisted attaching options exercisable at A$0.30
each with an expiry date of 4 years from the date of completion of due
diligence.
On 8 April 2008 SML advised the ASX that SML would not be proceeding with the
placement of 9.9% of Sierra shares to Medusa under the HOA, and Medusa agreed
not to take up the placement in an announcement to the ASX and AIM markets.
Subsequently, on 23 June 2008, SML has made a claim against Medusa relating to
the HOA and has demanded that Medusa subscribes for the securities. Medusa
denies it has any obligation to take up the proposed placement and will defend
any legal proceedings that may be commenced.
There have been no developments in the period since the annual report.
Note 8: Commitments
There has been no change to the commitments as disclosed in the Group's 30
June 2009 annual financial report.
Note 9: Related Parties
Arrangements with related parties continue to be in place. For details on
these arrangements, refer to 30 June 2009 annual financial report.
Note 10: Events subsequent to balance date
* Mr Kevin Tomlinson resigned as Non-Executive Chairman of the Company on
13 January 2010; and
* Mr Andrew Boon San Teo was appointed as a Non-Executive Director on 15
February 2010.
There has not arisen in the interval between the half-year ended 31 December
2009 and the date of this report any other item, transaction or event of a
material or unusual nature likely, in the opinion of the Directors of the
Company, to affect significantly the operations of the Consolidated Group, the
results of those operations, or the state of affairs of the Consolidated
Group, in subsequent financial periods.
CONDENSED NOTES TO THE FINANCIAL STATEMENTS
for the half-year ended 31 December 2009
Note 11: New standards and interpretations not yet adopted
AASB 127 Consolidated and Separate Financial Statements (March 2008) - "AASB
127R" supersedes AASB 127 Consolidated and Separate Financial Statements (July
2004). AASB 127R amends how entities account for business combinations and
changes in ownership interests in subsidiaries. Many changes were made to this
standard affecting acquisitions and disposals which do not result in a change
of control, partial disposals where control is lost, attribution of profit or
loss to non-controlling interests and loss of significant influence or control
in relation to Associates and Joint Ventures. AASB 127 replaces the term
"Minority Interest" with the "Non-controlling Interest". AASB 127 is applied
retrospectively, with certain exceptions relating to the significant changes
made in this revision. The standard is applicable to entities with an annual
reporting period ending on or after 30 June 2010. As the transitional
provisions of AASB 127 provide that the changes to the recognition and
measurement criteria within AASB 127 resulting from this revision do not apply
retrospectively to business combinations effected prior to the amendments
being adopted, this standard is not expected to have any impact on the
entity's financial report. The standard has significant impact for entities
who have changed ownership percentage of subsidiaries.
IFRS 9 Financial Instruments (to be issued in Australia as AASB 9) replaces
AASB 139 Financial Instruments: Recognition and measurement (part). IFRS 9
introduces new requirements for the classification and measurement of
financial assets. IFRS 9 uses a single approach to determine whether a
financial asset is measured at amortised cost or fair value, replacing the
many different rules in AASB 139 and removes the impairment requirement for
financial assets held at fair value. The standard is applicable to entities
with an annual reporting period after 31 December 2013. IFRS 9 amends the
classification and measurement of financial assets; the entity has not yet
determined the impact of this standard due to it's late release date.
Depending on assets held, there may be significant movement of assets between
fair value and cost categories and ceasing of impairment testing on available
for sales assets.
AASB 2008-8 Amendments to Australian Accounting Standards - Eligible Hedged
Items [AASB 139] supersedes pronouncement AASB 139 Financial Instruments:
Recognition and Measurement. AASB 2008-8 makes amendments to AASB 139 to
clarify the application of some of AASB 139's requirements on designation of a
risk or a portion of cash flows for hedge accounting purposes. The main issues
addressed are: ? Designation of one-sided risks ? Designation of portions of
cash flows of a financial instrument, with reference to inflation components;
and ? Hedge effectiveness when hedging one-sided risks with a purchased
option. As the entity does not apply cash flow hedge accounting, these
amendments will not have any impact on the entity's financial report. The
standard is applicable to entities with an annual reporting period after 31
December 2010
AASB 2009-4 Amendments to Australian Accounting Standards has arisen from the
Annual Improvements Project [AASB 2, AASB 138 and AASB Interpretations 9 &
16]. The standard makes various amendments to a number of standards and
interpretations in line with the IASB annual improvements project. The impact
on the results of the Company is unlikely to be significant. The standard is
applicable to entities with an annual reporting period ending on or after 30
June 2010.
AASB 2009-5 Further Amendments to Australian Accounting Standards has arisen
from the Annual Improvements Project [AASB 5, 8, 101, 107, 117, 118, 136 &
139]. The standard makes various amendments to a number of standards and
interpretations in line with the IASB annual improvements project. The impact
on the results of the Company is unlikely to be significant. The standard is
applicable to entities with an annual reporting period ending on or after 31
December 2010.
AASB 2009-7 Amendments to Australian Accounting Standards [AASB
5, 7, 107, 112, 136 & 139 and Interpretation 17]. AASB 2009-7 makes amendments
to correct errors that occurred in AASB 2008-12, AASB 2008-13 and
Interpretation 17, as well as amendments which reflect changes made by the
IASB to its pronouncements. The editorial amendments have no major impact on
the requirements of the amended pronouncements. The impact on the results of
the Company is unlikely to be significant. The standard is applicable to
entities with an annual reporting period ending on or after 31 June 2010.
AASB 2009-10 Amendments to Australian Accounting Standards - Classification of
Rights Issues. This standard supersedes AASB 132 Financial Instruments:
Presentation. AASB 2009-10 makes amendments which clarify that rights, options
or warrants to acquire a fixed number of an entity's own equity instruments
for a fixed amount in any currency are equity instruments if the entity offers
the rights, options or warrants pro rata to all existing owners of the same
class of its non-derivative equity instruments. As the entity does not have
any rights, options or warrants to acquire their own equity instruments, these
amendments will not have any impact on the entity's financial report. The
effective date of adoption of the standard relates to annual reporting periods
ending on or after 31 January 2011.
IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments. This
interpretation addresses the accounting by an entity when the terms of a
financial liability are renegotiated and result in the entity issuing equity
instruments to a creditor to extinguish all or part of the financial
liability. These transactions are sometimes referred to as 'debt for equity
swaps'. This interpretation is applicable to entities with an annual reporting
date on or after 1 July 2010. As the entity has not renegotiated any financial
liabilities into equity instruments this interpretation is not expected to
have any impact on the entity's financial report.
DIRECTORS' DECLARATION
The Directors of the Company declare that:
1. The financial statements and notes, as set out on pages 31 to 41:
a. comply with Accounting Standard AASB 134: Interim Financial Reporting and
the Corporations Regulations; and
b. give a true and fair view of the Consolidated Group's financial position as
at 31 December 2009 and of its performance for the half year ended on that
date.
2. In the Directors' opinion there are reasonable grounds to believe that the
Company will be able to pay its debts as and when they become due and
payable.
This declaration is made in accordance with a resolution of the Board of
Directors.
GEOFFREY J DAVIS
Managing Director
Dated this 23rd day of February 2010
The Company's Interim Financial Report will be available on its website
www.medusamining.com.au <http://www.medusamining.com.au/>
[HUG#1387647]
Half Yearly Report Accompanying Images: http://hugin.info/138050/R/1387647/345981.pdf
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