Positive results Medusa's Bananghilig deposit

Gold producer Medusa Mining said that operations at its Bananghilig Gold Deposit in the Philippines are now focused on upgrading the resource to the 'indicated' category.

The drilling programme, which started in July 2010, aims to extend the current resource to provide a reserve of around 1m ounces of gold. "This reserve would form the basis for a feasibility study which would target production of 200,000 ounces of gold per year from a new milling facility," the statement said.

Highlights from recent drilling include: hole number TDH 105 which showed a grade of 17.09g/t from a 6.05m width section; and hole number TDH 115 which showed a grade of 1.54g/t from a 28.55m section.

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"It is pleasing that drilling continues to provide positive results in and around the existing resource which allows us to progress to infill drilling and to upgrade the resource category to predominantly Indicated, which will then be used for reserves modelling later in the year," said Medusa's Managing Director Peter Hepburn-Brown.

Some 21 holes were completed between August 31st and December 31st.

Markets reacted positively to the news on Tuesday, with shares trading up 2.43% at 368.25p by 14:36.