Medusa Mining is confident that it can deliver on its production forecast of 100,000 ounces from the Co-O Gold Project during the 2010-11 financial year. Production up to December 31 was 51,127 ounces with 26,123 in the December quarter and 25,004 in the September quarter.
The company is undertaking mill expansion works at the project which will help it reach the immediate aim of 200,000 ounces annually. It has mapped out a five year growth plan to annual production of 400,000 ounces.
With the expansion, a new thickener has been commissioned and construction of a new water storage tank for mill water is complete. Installation is under way of two new leach tanks to increase the daily leaching capacity to about 1000 tonnes while expansion and upgrading of the gold room is expected to be completed at the end of March.
Medusa's managing director Geoff Davis says, “It is pleasing to see the company continuing to meet its forecasts and timeframes in terms of gold production and completion of expansion works to enhance the operation. The board's decision to approve the construction of a new self-funded mill to increase annual production capacity at Co-O to 200,000 ounces is a major step forward in the five year path.
“At Co-O, the Saga Shaft will significantly enhance the mine operations. The start of a level 1 adit on the Royal Veins at the end of January is an important step in opening-up the Royal and North Tinago veins for production in the future, and will provide additional development ore in the process.
“The encouraging drill results from the First Hit Vein at the Saugon project add the potential for the development of an additional ore source.
“At the Bananghilig project six rigs are now operational with two rigs starting validation drilling of the current resource and four rigs undertaking extensional drilling.”
Co-O has indicated resources of 603,000 ounces @ 13.2 grams/tonne gold and inferred resources of 898,000 ounces @ 9.6 grams/tonne. There are 505,000 ounces of probable reserves @ 10.7 grams/tonne. Bananghilig has 650,000 inferred ounces of resources @ 1.3 grams/tonne.
There is excellent exploration upside at high grade vein and disseminated bulk gold targets as well as at seven copper targets with Co-O having a conceptual exploration target of 3 to 7 million ounces.