New Porphyry Copper-Gold Target

 
TIDMMML 
 
MEDUSA MINING LIMITED 
                                                       ABN: 60 099 377 849 
 
                                                 Unit 7, 11 Preston Street 
                                                            Como  WA  6152 
 
                                                                PO Box 860 
                                              Canning Bridge  WA  6153 
 
                                             Telephone:  [phone] 
                                                 Facsimile:  618-9367 0602 
 
      Email:  [e-mail] <mailto:[e-mail]> 
      Internet:  www.medusamining.com.au <http://www.medusamining.com.au/> 
 
 
                                                                    ANNOUNCEMENT 
                                                                     05 May 2010 
 
 
                        NEW PORPHYRY COPPER-GOLD TARGET 
Medusa  Mining  Limited  (ASX  and  AIM  -  MML;  TSX  -  MLL)  ("Medusa" or the 
"Company"),   through   its   Philippines   operating  company  Philsaga  Mining 
Corporation  ("Philsaga"),  advises  that  it  has  discovered a new outcropping 
porphyry copper-gold target named Usa. 
The  target has so far  been defined by reconnaissance  outcrop sampling over an 
area  of approximately 500 metres by  500 metres with possible extensions.  Rock 
chip values range up to 0.59% copper and 0.42 g/t gold. 
 
Geoff Davis, Managing Director of Medusa, commented: 
"The  discovery  of  new  mineralised  outcropping  copper-gold  porphyry at Usa 
highlights  the  unquestioned  prospectivity  of  our  large tenement area. This 
discovery brings the total of copper targets to seven. 
The  Company has no doubt that  on-going exploration will uncover other targets, 
and   with   our  aggressive  drilling  programmes,  we  will  continue  to  add 
considerable value to our asset base". 
 
Background 
The  Usa prospect is  predominantly contained within  Mineral Production Sharing 
Agreement  application  ("APSA")  XIII-00077.  The  Company  has a Memorandum of 
Agreement with Corplex Resources Inc. ("Corplex") whereby: 
  * Corplex will receive a 4% gross royalty on all production, or 
  * in  the event of a  major discovery and completion  of a scoping study which 
    demonstrates at least a five year mine life, Corplex can elect to: 
 
 a. buy  back a 30% interest by re-imbursing to  the Company a sum equal to four 
    times the expenditure on the tenement; and 
 b. contribute  to 30% of  all on-going  expenditure from  the point of buy-back 
    forwards. 
 
Or, 
 c. should  Corplex elect  not to  contribute to  all on-going expenditure, then 
    Corplex can elect once only to dilute to a 15% non-contributing free carried 
    interest  to commencement  of production,  at which  point the Company shall 
    provide a loan to Corplex to fund its 15% interest; or 
 d. in  the event that Corplex does not exercise the buy-back, then Corplex will 
    maintain its 4% gross royalty on production. 
 
There  are indications that the prospect  extends eastwards into APSA XIII-00098 
which  is owned by Mindanao Philcord Mining Corporation which will receive a 1% 
net profits interest from any production. 
Regional Setting 
Figure  1 (please  see  link  at  the  end  of  this announcement) shows the Usa 
prospect  location and regional geology, Figure 2 (please see link at the end of 
this  announcement)  shows  the  detailed  geology and geochemistry contours and 
Figure 3 (please see link at the end of this announcement) shows an aeromagnetic 
image overlain by the geochemistry contours. 
The  Usa  prospect  is  located  adjacent  to  the west side of the Barobo Fault 
corridor.   This  fault  is  parallel  to  the  Philippine  Rift  Fault  located 
approximately  30 kilometres to the west of  the Usa prospect.  The Barobo Fault 
corridor  has numerous gold  prospects already located  along or adjacent to it, 
including Guinhalinan, Umbon, Matanog, Alikway and Usa. 
The  Company  interprets  the  Barobo  Fault  corridor  as being prospective for 
intrusive  and structurally controlled styles of copper and gold mineralisation. 
Old  grey limestone and calcareous sediments  are intruded by multiple phases of 
dacite, diorite and andesite porphyry. 
Styles  of mineralisation  exposed along  the corridor  include pyrite  and base 
metal  sulphide  bearing  hydrothermal  and  tectonic  breccias;  skarn  related 
magnetite,  pyrite, base  metal sulphide  and gold  bearing veins;  pyrite, base 
metal  sulphide  gold  bearing  quartz-carbonate  veins  and  vein breccias; and 
disseminated,  fracture controlled pyrite  and base metal  sulphide in intrusive 
bodies  and surrounding host rocks. Skarn  related magnetite, pyrite, copper and 
gold mineralisation are also noted. 
Local Geology and Mineralisation 
The  geology  consists  of  a  mineralised  and altered diorite complex which is 
intruding  andesitic volcanics,  older limestone  and calcareous  sediments. The 
setting  and style of mineralisation are very  similar to that at the Kamarangan 
copper-molybdenum   porphyry  prospect  to  the  north  where  chalcopyrite  and 
magnetite  bearing diorite  was intersected  over several  hundred metres in two 
holes  during a scout diamond drilling completed in late 2008 to early 2009 (see 
announcement dated 29 May 2009). 
The  fine- to  medium-grained diorite  is variably  but strongly phyllic altered 
(white  clay, sericite and pyrite) with  variably dispersed hairline veinlets of 
fine-grained magnetite. Chlorite alteration is rare proximal to the diorite, but 
increases  to moderate intensity in volcanic  units distal to the diorite. North 
east  trending fractures and veinlets within and on the edges of the diorite are 
often  lined with  fine-grained pyrite  and magnetite.  The diorite has variably 
distributed  weak  pervasive  grey  silica  alteration, and is locally stockwork 
veined  with fine 2 to 3 mm  thick clear and grey  quartz veins; the veins often 
have  fine-grained pyrite,  magnetite and  occasional bornite disseminated along 
the selvages. 
Mineralisation  is  predominantly  pyrite  occurring  as fracture filling grains 
disseminated grains and vein infill. The pyrite is accompanied with bornite, and 
with   occasional  chalcopyrite.  Malachite  stained  limestone  and  calcareous 
sediments  with  sphalerite,  pyrite  and  bornite veins, and weakly mineralised 
pyrite  and chalcopyrite magnetite have been  noted in drainage float samples to 
the north of the diorite. 
Contouring  of the rock chip copper results (>700 ppm Cu) and gold results (>0.1 
g/t Au) are shown on Figure 2 (please see link at the end of this announcement). 
The  gold  and  copper  contours  are  in close spatial proximity. The anomalous 
copper and gold values also overlie three magnetic high features, visible in the 
1st vertical  derivative of airborne magnetic data shown on Figure 3 (please see 
link  at the end of this announcement).  The magnetic features appear to reflect 
zones of strong magnetite alteration in the diorite. 
The  relationship of the diorite body to  the surrounding rocks suggests that it 
has been recently uncovered and is not deeply eroded. 
Artisanal  mining activity with small but consistent recoveries is common in the 
drainages  overlying  and  downstream  of  the mineralised altered diorite. Less 
active  artisanal mining activity is noted to  the north where chlorite and clay 
altered, sulphide veined andesitic units occur. 
A large grid based soil sampling program designed to delineate the extent of the 
gold and copper mineralisation is expected to commence in May 2010. 
ASSAYING PROCEDURES 
Rock  chip  samples  were  prepared  and  assayed  for base metal content at the 
Philsaga  Laboratory using internal laboratory  procedure "Al Block". The scheme 
allows  for copper, lead  and zinc determinations  via a three  acid digest with 
conventional Atomic Absorption Spectrometry ("AAS") finish. The scheme is graded 
at  geochemical  grade  detection  levels  only  (not  ore  grade). Gold content 
determinations  were via  internal laboratory  procedure "FA-30".  The procedure 
uses   a  conventional  30 gram  sample  charge  fire  assay  with  AAS  finish; 
gravimetric finish is conducted on high grade results. 
Rock  chip sample pulps were submitted to  McPhar Geoservices Inc. in Manila for 
check  assaying.  The  samples  were  submitted  with  the appropriate number of 
blanks, duplicates and Certified Reference Materials. The pulps were assayed for 
copper,  lead and  zinc determinations  by laboratory  scheme AA1. The procedure 
uses  a three acid digest with conventional  AAS finish. The procedure is graded 
at  ore grade detection levels. Gold content determinations were by conventional 
30 gram fire assay with AAS/GTA finish (McPhar procedure PM5). 
A review of the quality assurance and quality control measures from the original 
samples,  and subsequent check samples, produced  results that can be considered 
acceptable and within industry standard. 
 
For further information please contact: 
 Australia 
 
 Medusa Mining Limited                       [phone] 
 
 Geoffrey Davis, Managing Director 
 
 Roy Daniel, Finance Director 
 
 United Kingdom 
 
 Fairfax I.S. PLC                            [phone] 
 
 Nominated Adviser and Broker 
 
 Ewan Leggat/Laura Littley 
 
 Lothbury Financial Services Limited         [phone] 
 
 Michael Padley/Libby Moss 
 
 Canada 
 
 Nicholas Sayce, Investor Relations          [phone] 
 
 
Information in this report relating to Exploration Results has been reviewed and 
is  based on  information compiled  by Mr  Geoff Davis,  who is  a member of The 
Australian  Institute of  Geoscientists. Mr  Davis is  the Managing  Director of 
Medusa  Mining Limited  and has  sufficient experience  which is relevant to the 
style  of mineralisation  and type  of deposits  under consideration  and to the 
activity  which he is undertaking to qualify  as a "Competent Person" as defined 
in  the  2004 Edition  of  the  "Australian  Code  for  Reporting of Exploration 
Results,  Mineral Resources  and Ore  Reserves" and  is a  "Qualified Person" as 
defined   in   "National   Instrument   43-101" of   the   Canadian   Securities 
Administrators.  Mr Davis consents to the inclusion in the report of the matters 
based on his information in the form and context in which it appears. 
Refer   to   the   Technical   Report   which   was   filed   on   www.sedar.com 
<http://www.sedar.com/>  in  March  2010 for  further  discussion  of  the  Co-O 
Deposit's   geology,   structural  controls,  drilling,  sampling  and  assaying 
information,  and any  known material  environmental, permitting,  legal, title, 
taxation, socio-political, marketing or other relevant issue. 
ABOUT MEDUSA MINING LIMITED 
Medusa  Mining Limited ("Medusa"  or the "Company"),  a public company listed on 
the  ASX, AIM and the TSX, is an Australian based gold producer, focussed solely 
on the Philippines. 
With  current mineral resources comprising  indicated 580,000 ounces of gold and 
inferred  1,310,000 ounces of gold,  Medusa's corporate strategy  is to become a 
mid-tier, 300,000 to 400,000 ounce per year, low-cost gold producer. 
The  Company has completed the expansion of  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 a 
production  level 100,000 annualised  ounces, and  is currently  conducting near 
mine  exploration to assess the  possibilities of further  expansion to 200,000 
ounces  per annum.  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 for the discovery of substantial copper deposits 
within the tenement holding of more than 800 km2. 
 
DISCLAIMER 
This  announcement  may  contain  certain  forward-looking statements. The words 
'anticipate',  'believe', 'expect', 'project', 'forecast', 'estimate', 'likely', 
'intend',   'should',   'could',  'may',  'target',  'plan'  and  other  similar 
expressions are intended to identify forward-looking statements. Indications of, 
and guidance on, future earnings and financial position and performance are also 
forward-looking statements. 
Such  forward-looking statements  are not  guarantees of  future performance and 
involve  known and unknown risks, uncertainties and other factors, many of which 
are  beyond  the  control  of  Medusa,  and  its officers, employees, agents and 
associates,  that  may  cause  actual  results  to  differ materially from those 
expressed or implied in such statements. 
Actual   results,  performance  or  outcomes  may  differ  materially  from  any 
projections  and forward-looking statements  and the assumptions  on which those 
assumptions are based. 
You  should not place  undue reliance on  forward-looking statements and neither 
Medusa  nor  any  of  its  directors,  employees,  servants or agents assume any 
obligation to update such information. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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