Medusa Mining (ASX: MML) is an Australian based gold producer, focused solely on the Philippines. Medusa's corporate strategy is to become a mid-tier, 300,000 to 400,000 ounce per year, low-cost gold producer.
Medusa Mining completes re-interpretation of the resource model for the Co-O Mine
Australian-based gold producer Medusa Mining (ASX/AIM: MML, TSX: MLL), through its Philippines operating company Philsaga Mining Corporation, has wrapped up a re-interpretation of the resource model for the Co-O Mine, located in the Philippines.
The revised resource is JORC and NI 43-101 compliant, with a large number of drill hole intersections are yet to be included in the re-interpretated resource model.
This re-interpretation has marginally decreased the Inferred Resources but maintained the Indicated Resources taking into account production and stockpiles.
This now provides an accurate development based model for expanding the mine to the east. Thirty-five veins have now been modelled with resources and more are expected to be identified. Future resource updates will be done annually in June-July.
In addition, estimates of the conceptual potential target size** of the Co-O Mine using various parameters indicate a range from 3,000,000 ounces in 9,300,000 tonnes to 7,000,000 ounces in 22,000,000 tonnes using a grade range of 9 to 11 g/t gold with a preferred average grade of the current resources of 10 g/t gold.
Medusa Managing Director Geoff Davis said the re-interpretation based on on-vein development now provides a solid foundation for growing the mineral resources on the east of the Oriental Fault.
"Estimates of the conceptual potential target size of Co-O indicate 3 to 7 million ounces of gold. On-going drilling and development is continuing with the aim of unlocking this potential," Mr Davis said.
"The sole purpose of the re-interpretation was to correct 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."
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 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.
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 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$200 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.
