TIDMMML
RNS Number : 3570J
Medusa Mining Limited
06 August 2012
Medusa Mining Limited
("Medusa" or the "Company")
Co-O MINE MINERAL RESOURCE UPDATE
6 August 2012
Medusa Mining Limited ("Medusa" or the "Company"), through its
Philippines operating company, Philsaga Mining Corporation
("Philsaga"), advises that it has completed the annual resource
estimate for the Co-O Mine.
In line with the mine expansion, the FY 2012 drilling has
focused on infill drilling to increase confidence levels in key
mining areas as well as stepout drilling along strike and at depth
to demonstrate the excellent upside of the deposit. Whilst, the
strike length has been increased by 400 metres to 2,000 metres, and
is still open in all directions continuing to demonstrate excellent
potential to add more resources in future years, many drill
intersections undertaken in the FY 2012 drilling campaign are not
incorporated into the resource model as the spacing of the drilling
is still too wide along strike and down dip.
A 3 g/t gold lower cut-off has been applied to the resource
(previously a 0 g/t gold cut-off), resulting in total resources of
6,215,000 tonnes containing 2,019,000 ounces at a grade of 10.1 g/t
gold (compared to 1,960,000 ounces at 9.6 g/t gold in FY2011 and
after taking into account gold produced of 60,595 ounces since 30
June 2011). The Indicated Resource has increased by 16% to 715,000
ounces at 11.8 g/t gold (from 616,000 ounces at 12.0 g/t gold).
Table I. Co-O Mine mineral resource estimate at 30 June 2012
> 3 g/t gold
Category tonnes g/t gold ounces
Indicated resources 1,890,000 11.8 715,000
Inferred resources 4,325,000 9.4 1,304,000
TOTAL RESOURCES 6,215,000 10.1 2,019,000
Peter Hepburn-Brown, Managing Director of Medusa, commented:
"This increase in Indicated Resources is pleasing as confidence
levels have been significantly improved in key areas of the mine.
The step-out drilling strongly supports future resource additions
as the mineralised system remains open in all directions including
at depth where the deepest ore grade intersection achieved to date
is at 1,073 metres below surface. The current wide spacing of many
step-out surface drill holes prevents incorporation of their
corresponding intersections into the resource model.
Drilling is planned to continue with 6 surface and 3 underground
rigs during FY 2013 with the aim of raising the resource level to
approximately 2,500,000 ounces following which the on-going
drilling programmes will be tailored to replace at a minimum, mined
ounces each year to maintain the resource base."
MINERAL RESOURCE MODEL
Discussion
Drilling has continued since the 27 July 2011 resource model
update and this new resource model is based on data available as at
30 June 2012.
In line with the mine expansion, surface and underground diamond
drilling has focused on infilling in key mining areas to increase
confidence levels for detailed mine planning and expanded
production. It has also demonstrated considerable upside to the
Co-O vein system at the eastern end of the mine, at depth and
recently to the west of the Tinago Fault.
The step-out drilling along strike has increased the strike
length of mineralisation by 400 metres from 1,600 metres to 2,000
metres which is still open east and west and at depth. It should be
emphasised that a significant number of step-out drill hole
intersections reported since 7 July 2011 cannot be incorporated
into the resource estimate as the spacing of drilling is still too
wide along strike and down dip.
The number of veins in the Co-O Vein system is expanding and,
due to the increasing diversity of vein types and grade variability
between veins, a 3 g/t lower gold cut-off has been introduced
(compared to FY 2011 where a 0 g/t gold cut-off was used). This has
increased the global resource grade to 10.1 g/t gold from 9.6 g/t
gold. The ounces below the 3 g/t gold cut-off total 60,000 ounces.
In addition, level and stope development on some veins during the
year showed less continuity of grades than predicted which required
some changes to previously estimated grades, and faulting has
affected some veins until the offsets are re-located.
Table II is a summary of the resources for the major veins. A
total of 66 veins have been modelled.
Table II. Co-O Mine mineral resource estimates for the major
veins at 30 June 2012 with >=50,000 ounces
Vein name Category > 3 g/t gold
tonnes g/t gold contained
ounces
Central Vein Indicated 324,000 10.3 106,800
Inferred 150,000 3.9 19,000
Jeremy Vein Indicated 122,000 12.4 48,700
Inferred 10,000 4.3 1,400
Great Hamish Indicated 251,000 17.5 140,900
Inferred 258,000 14.6 120,800
Great Hamish East
FW Indicated 39,000 12.3 15,400
Inferred 241,000 8.6 66,600
Great Hamish FW2 Indicated 293,000 13.7 128,800
Inferred 432,000 10.5 145,100
Catto 1 Indicated 59,000 12.6 23,800
Inferred 75,000 24.5 59,400
Roysan Indicated 66,000 21.6 46,100
Inferred 88,000 14.1 39,900
East Agsao 1 Inferred 206,000 11.2 73,900
East Agsao 2 Indicated 51,000 9.3 15,300
Inferred 197,000 9.2 58,200
East Agsao 7 Indicated 97,000 8.3 25,900
Inferred 274,000 8.7 76,900
East Agsao 14 Indicated 20,000 6.3 4,000
Inferred 411,000 7.4 97,800
East Agsao 15 Indicated 28,000 6.9 6,100
Inferred 596,000 8.5 162,400
East Agsao 3 Inferred 133,000 15.4 65,800
Other veins Indicated 541,000 8.8 153,000
Inferred 1,253,000 7.9 316,500
Total Indicated Resources
(rounded) 1,890,000 11.8 715,000
Total Inferred Resources (rounded) 4,325,000 9.4 1,304,000
TOTAL RESOURCES (rounded) 6,215,000 10.1 2,019,000
Notes:
- A lower cut-off of 3 g/t gold has been applied
- Variable upper cuts up to 300 g/t gold have been applied to
different veins
- Rounding to the nearest 1,000 may result in some slight
discrepancies in totals.
The increase in confidence levels in key mining areas has
boosted the Indicated Resource by 16% to 715,000 ounces from
616,000 ounces. The Indicated Resource will now be used to estimate
the new Probable Reserve.
It should be noted that 1,252,000 ounces or 62% of the resources
are located above level 8, the bottom level to be accessed by the
Saga Shaft.
Figure 1 (please see link at the end of this announcement) shows
the updated 3D resource model. The veins are open at depth, to the
east and to the west. The resource model now stretches over a
strike length of approximately two kilometres demonstrating
excellent potential to add more resources in future years.
Figure 2 (please see link at the end of this announcement) is
the Level 6 map of the Co-O Mine area showing the veins in the 3D
resource model at Level 6.
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 30 June 2012. A Specific Gravity value
of 2.62 was used in the estimations. 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 Exploration Results,
Mineral Resources and Ore Reserves (JORC Code).
For further information please contact:
Australia
Medusa Mining Limited
Peter Hepburn-Brown, Managing
Director +61 8 9367 0601
United Kingdom
Fairfax I.S. PLC
Financial Adviser and Broker
Ewan Leggat/Laura Littley +44 (0)20 7598 5368
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 Chairman 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 "Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves" and is a "Qualified Person". 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.
Information in this report relating to Mineral Resources has
been estimated and compiled by Mr Mark Zammit of Cube Consulting
Pty Ltd of Perth, Western Australia. Mr Zammit is a member of the
Australian Institute of Geoscientists 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
"Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves". 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.
Please click on or paste the following link in your browser to
view Figures 1 and 2
http://www.rns-pdf.londonstockexchange.com/rns/3570J_-2012-8-6.pdf
This information is provided by RNS
The company news service from the London Stock Exchange
END
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