Medusa completes drilling in Bananghilig gold deposit

MANILA, Philippines - Australian miner Medusa Mining Limited, which operates through its local arm Philsaga Mining Corp., has completed the infill drilling in the Bananghilig gold deposit, allowing it to come up with an indicated resource estimate of the ore deposit.

“It is pleasing to see the infill drilling continue to confirm continuity of the mineralisation. The infill drilling has been topographically constrained in some areas in which case further infill drilling to upgrade these areas will be undertaken once permitting progresses and prior to commencement of mining,” said Medusa managing director Peter Hepburn-Brown in a disclosure to the Australian Stock Exchange.

“Based on the continuity demonstrated to date, we are confident that further infill drilling will also be positive.”

Medusa has upgraded its inferred resource estimate for its Bananghilig gold deposit within the Tambis district in eastern Mindanao.

The new inferred resource is estimated at 1,100,000 ounces at a grade of 1.63 per ton contained in 21,000,000 tons of ore using a lower cut-off of 0.8 grade per ton of gold. This represents an increase of 69 percent from the previous resource announced on August 12, 2009 of 650,000 ounces at a grade of 1.3 per ton, applying a cut-off of 0.6 grade per ton.

The indicated resource estimate that will be created following the interpretation of date obtained from infill drilling will be used for pit optimization and subsequent feasibility studies.

The Tambis Project is operated under a mining agreement with Philex Gold Philippines Inc. over Mineral Production Sharing Agreement (“MPSA”) 344-2010-XIII which covers 6,262 hectares.