Response to Crosby Capital Offer

    Response to Crosby Capital Offer
             



23 September 2008

                        MEDUSA MINING LIMITED
                             (AIM: MML)


  CROSBY CAPITAL'S PROPOSED UNSOLICITED HIGHLY CONDITIONAL TAKEOVER
                                OFFER

          NO ACTION should be taken by Medusa shareholders

On 19 September 2008 Crosby Capital Limited ("Crosby") of Hong Kong
announced a proposal to make an unsolicited and highly conditional
takeover offer ("Offer Announcement") for Medusa Mining Limited
("Medusa" or the "Company"). The main points are:


  * Crosby has proposed an offer price of AUD$1.15 cash per share.
    The offer price represents only a 21.1% premium to the near 12
    month low closing price on Thursday 18 September 2008;
  * no Bidder's Statement has yet been provided - Crosby has
    indicated that it proposes to make the offer in October 2008; and
  * the proposed offer is highly conditional - it is subject to 21
    defeating conditions, details of which are set out in the Offer
    Announcement.  Amongst others, these conditions include;

(i)            a minimum acceptance level of 90%;
(ii)           a detailed investigation and report by an Independent
Expert;
(iii)          market-related events;
(iv)         provision of access and information to Crosby, whether
or not such information is generally available; and
(v)          no material adverse change.

The Medusa Board has conducted an initial review of the proposed
offer and believes that the offer is inadequate and opportunistic.
Shareholders are advised to TAKE NO ACTION in relation to Crosby's
proposed offer. When the offer documents are received by Medusa, the
Company will review these and provide further advice and
recommendations to shareholders in a timely manner for shareholders
to make an informed decision.

The Medusa Board notes that:

* The Board and Management of Medusa together hold 17.15% of the
  issued shares in the capital of Medusa.  The Board and Management
  do not propose to accept Crosby's offer on the terms announced, and
  on that basis the 90% minimum acceptance condition will not be
  satisfied.
* The Board does not consider it appropriate to provide an
  Independent Expert or Crosby with access to the Company's
  proprietary information in the circumstances and for the purposes
  indicated in the Offer Announcement.

ABOUT MEDUSA

Medusa is an expanding gold producer operating in the Philippines. It
has provided production guidance for the period July 2008 to June
2009 of 38,000 to 45,000 ounces, and 80,000 ounces for the following
year. The Company's resource base at the Co-O Mine is 862,000 ounces
at 10.7g/t gold including probable reserves of 249,000 ounces at 10.7
g/t gold. Drilling is continuing to expand the resources. The Company
anticipates a long term cash cost of US$200 per ounce.


For further information, please contact:


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

Fairfax I.S. PLC                        [phone]
Nominated Adviser/Joint Broker
Simon Stevens / Ewan Leggat

Mirabaud Securities Limited             [phone]
Joint Broker
Peter Krens / Rory Scott

Lothbury Financial                      [phone]
Michael Padley / Louise Davis

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