Medusa Mining has been granted two Small Scale Mining Permits over prospective areas at the Anoling Gold Project in the Philippines.

The company will immediately begin exploration via exploration shafts and underground development of some of the abandoned mines, as well as start diamond drilling.

The Anoling Project consists of a large number of artisanal workings and old mines dating back to pre-World War II.

The workings are generally located on westerly trending vein systems, with some indications of a conjugate north-east trending vein system. The veins generally consist of banded quartz-carbonate material within clay-chlorite-pyrite gouge zones with both types of material carrying gold values. Examination of old workings shows that the veins pinch and swell up to approximately 2 metres wide and appear to occur in shoots of between 50 and 100 metres in length. Typical grades are anticipated to be in the 8 -12 grams/tonne gold range, although a 1980s mine to approximately 100 metres depth at the eastern end of the property is reported to have produced ore at approximately 30 grams/tonne gold.

All ore derived from this project will be sent to the central Co-O processing plant as the development work advances.

Medusa managing director Geoff Davis says: "The granting of these two tenements is another significant step forward, as the company anticipates that additional production is possible from this project in the near term.

"This will assist the Company to steadily increase its total production to the targeted level of 100,000 ounces/year in 2008".