Medusa Mining unveils results of Bananghilig gold deposit study

Medusa Mining's shares surged Tuesday after the company reported an encouraging first pass scoping study on its Bananghilig gold deposit in the Philippines.

The study indicated capital expenditure of $220m and mill operating expenses of $12 per tonne.

Cash costs were pegged at $565 per ounce with mining operating expenses of $15.50 per tonne, a strip ratio of 5:1 and indicative diluted head grade of 1.3 grams per tonne (g/t).

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A mill with a capacity of 5.0m tonnes per annum is expected to produce 200,000 annualised ounces.

The Bananghilig deposit currently comprises an indicated resource of 11.9m tonnes at 1.59 g/t gold for 0.61m ounces and an inferred resource of 9.0m tonnes at 1.62 g/t gold for 0.47m ounces using a cut-off of 0.8 g/t gold.

Fourteen additional infill drill holes are nearing completion which will be incorporated into the data base and used to estimate a revised resource and the initial reserve which will be published in September.

It will form part of a feasibility study undertaken by external consultants.

"We are very pleased with the progress of the Bananghilig Project and the positive outcome of the scoping study, such that work has already commenced on additional studies to progress the feasibility study," said Managing Director Peter Hepburn-Brown.

"We are optimistic that the feasibility study will enhance the project economics which we are aiming to complete in the September quarter. We are also very optimistic, especially based on the sterilisation drilling results announced last week, that there is a real opportunity to extend the mine life significantly."

RD