Diamond drilling continues to return encouraging intersections at Medusa Mining"s Anoling Gold Project in the Philippines.

Significant intersections for recent holes include 0.7 metres @ 11.16 grams/tonne gold, 0.6m @ 14.28 grams/tonne, 3.35m @ 13.14 grams/tonne and 2.6m @ 7.27 grams/tonne.

Two small scale Mining Permits have been granted over prospective areas at Anoling, which is about 8km by road from Medusa's Co-O processing plant.

The parallel Alcorn and Hope veins consist of banded quartz carbonate with minor pyrite and base metal sulphides. The veins are controlled by shear zones with consequent brecciation of the vein material in some places. The shearing has also induced vein width variations due to pinch and swell characteristics. Both veins are open at depth and to the east.

Underground exploration is continuing from the two Rose and two Loring shafts to verify the drill results achieved and to assess mining conditions.

Drilling is continuing along strike of the known veins, as well as to the north and south, to outline possible additional zones of mineralization that may justify underground exploration and assessment.

Medusa managing director Geoff Davis says: "The drilling continues to deliver positive results at Anoling. If underground exploration confirms drill results and suitable ground conditions for mining, this may allow the project to contribute ore to the plant in the third quarter of 2008. The company anticipates defining possible additional zones of mineralization as the drilling progresses to the east."

www.medusamining.com.au