Co-O gold mine drilling yields more high grade deposits

MANILA, Philippines - Australian miner Medusa Mining Limited has announced that more high grade gold deposits have been found in its ongoing drilling operation at its Co-O gold mine in Agusan del Sur.

In a statement, the company said results from the surface and underground drilling conducted from June 30, 2012 to Jan. 28, 2013 have consistently returned high grade gold intersections.

Some of the drill holes of the 50-hole drilling campaign returned the following gold grades: 14.94 grams per ton (g/t) at 2.76 meters (m); 19.08 g/t at 3.00m; 749.8 g/t at 1.20m; 19.25 g/t at 2.30m; 26.28 g/t at 4.80m; 21.97 g/t at 1.45m; 10.85 g/t at 2.55m; and 30.25 g/t at 1.70m.

Medusa operates in the Philippines through its local arm Philsaga Mining Corp.

Medusa managing director Peter Hepburn-Brown said drilling is continuing and the next resource update would be released in September 2013.

“The Co-O mine drilling continues to deliver high grade intersections over a strike length of approximately two kilometers and at depth. The drilling indicates the vein system appears to be weakening to the west of the Tinago Fault particularly near surface with the possibility of some higher grades at depth. Elsewhere drilling continues to return good values from infill and extensional drilling,” he said.

The Mines and Geosciences Bureau (MGB) has granted an amended Environmental Clearance Certificate (ECC) to Philsaga for the construction of a new mill that will increase gold production in the Co-O mine.

In an earlier disclosure to the Australian Stock Exchange, Medusa said the new mill, which is expected to be commissioned in the middle part of 2013, would have a processing capacity of 2, 500 tons of ore per day.

As of the end of its financial year June 30, 2012, the Co-O mine produced 60,595 ounces of gold at a recovery grade of 8.10 gram per ton (g/t) of gold, down from the previous year’s production of 101,474 ounces of gold at a recovery grade of 12.3 g/t of gold.

The production guidance for the next fiscal year has been placed between 100,000 to 120,000 ounces.

The restoration of the Co-O mine’s tilted leach tanks, the completion of a new large leach tank and the recommissioning of the damaged Baguio Shaft is expected to contribute to increased output for 2013.

In March, the 2012 production guidance for the mine was lowered to 60,000 ounces of gold from 65,000 ounces after tremors triggered by a magnitude 6.9 earthquake in Negros Island in February caused four large leach mill tanks to tilt. The leach tanks were decommissioned for five months for repair.

The four tilted leach tanks have been returned to service while the construction of the new large leach tank have been completed in mid-August.