Medusa Mining

With gold taking a breather before another battle with the US$1,000 mark, the same can not be said for gold focussed producer Medusa Mining. Not only does Medusa possess an enviable track record of high-grade gold production growth, but its low operating cost base has helped to boost overall operating margins at its Co-O gold mine in The Philippines.

In addition, whilst today's production activity is exciting enough, the company's enormous exploration attraction augurs well for the output of tomorrow. Results from two key exploration plays suggest a long extended production life for the company's Co-O mine, as well as potentially huge porphyry copper system in the early stages at the company's Tambis project.

The recent drilling programme at the company's Co-O mine concentrated on infill and extensional (up and down dip, and laterally) drilling within the current resource model, which allows the company to firm up its resource model. In addition, extensional drilling to the east of the Agsao River testing for continuation of the veins has commenced and is also providing good initial results.

From early July, drilling with eight surface rigs will continue, with three focusing on the main mine area, three on eastern extensions of the vein system, and two will start drilling other untested vein systems adjacent to the mine area.

Elsewhere in The Philippines, the company has enjoyed exploration success with respect to one of its exciting, up-and-coming projects. The company has completed ten scout drilling holes totalling 5,423 metres over a portion of its huge 10km diameter Kamarangan aeromagnetic anomaly, which hosts outcropping copper-gold mineralised magnetite skarn rocks within its Tambis project.

The drilling so far has located the western edge of a buried diorite intrusive containing primary copper and molybdenum mineralization and is open to the east. The diorite is located on the eastern side of the prospect. Meanwhile near the centre of the prospect, an elliptical deep-seated magnetic anomaly has been tentatively interpreted as a possible porphyry-style target which may be responsible for some of the skarn hosted mineralization in this area.

The company believes these initial results for copper, gold and molybdenum are very encouraging and confirm that the previously identified regional-scale features may be linked to a potentially major mineralised porphyry system. Further drilling will be conducted to follow-up these strong indications.

All in all, the company is enjoying tremendous exploration success at both Co-O, which is its flagship producing high-grade gold mine; and at Tambis, which is probably the company's highest-profile pure exploration project. We await the release of further exploration results with great interest.