Medusa Mining and its Philippine merged company Philsaga Mining have recently gained access to the Sinug-ang Prospect adjacent to and of the Co-O Mine on the Philippine island of Mindanao by executing an agreement with an underlying Small Scale Mining Permit owner in exchange for a 5% NSR royalty from 20 metres below existing underground workings.

Medusa Mining and Philsaga Mining Corporation recently completed the planned strategy of consolidating tenements, operating mines, plant and administration facilities and two experienced management teams. The Co-O plan is the only one in the district and the merged group of companies has a strategic advantage to maximise the development of any gold deposit discovered within trucking distance of the plant.

The Sinug-ang Prospect was explored in the 1980s by surface sampling. The vein zone is more than 1000 metres long trending in a north-north-west direction parallel to the Philippine Rift Fault trend. Some small scale mining activities of selected parts of the vein over a strike length of approximately 600 metres have been undertaken to a depth of approximately 175 metres below surface.

At the Gamuton Prospect, surface work has outlined a section of gold-bearing vein approximately 200 metres long with values to 11.2 grams per tonne gold over 1.2 metres wide in trenches. The vein lies along the footwall of an extensive westerly trending breccia zone which is up to about 50 metres wide. Other veins occur in the breccia zone.

Initially sites have been prepared for three holes with the first hole in progress.

At the Abacus Project, the Mines Operating Agreement (MOA) with Abacus Consolidated Resources and Holdings Inc covers Exploration Permit (EP) application number 000028-XIII situated in Agusan del Sur province in east Mindanao to the north of the Co-O mine and millsite. The EP covers approximately 81sqkm and covers extensions of the favourable geology found further to the south.

At the Anoling Project Medusa's MOA with Alcorn Gold Resources covers Mining Production Sharing Agreement (MPSA) application number 039-XIII situated in the Agusan del Sur province in east Mindanao to the north of the Co-O mine and millsite. The MPSA comprises approximately 4.05sqkm and covers mineralised extensions of the favourable geology found further south.

The granting of the Anoling MPSA will proceed when the Condition Precedent to the Philsaga Transaction involving resolution of mineral rights has been completed as this will set the precedent for many tenements in the area.

Medusa's MOA for the Das-agan Project covers Mining Production Sharing agreement (MPSA) application number 039-XIII situated in the Agusan del Sur province in east Mindanao to the north of the Co-O mine and millsite.

The MPSA for the Abacus EP, Anaoling and Das-agan MPSAs will proceed when the condition precedent to the Philsaga Transaction involving resolution of mineral rights has been completed as this will set the precedent for many tenements in the area.

At other project sites in the Philippines, Medusa has undertaken various works to progress the projects. At Saugon gold silver project (50% Medusa) recent work during the period was limited to field reconnaissance and starting relogging of drill core.

At the Masapelid Gold Project (Medusa earning 84%), data compilation and confirmation is well advanced in preparation for a confirmatory drilling program utilising the surface rig currently at Panaon when the Panaon program is completed.

At the Panaon gold project (divesting 50%) the first surface and the first underground drill holes have been completed with extremely low core recoveries in the zones of interest. The second underground hole achieved improved recoveries.

Medusa has raised Aus$3.356 million before costs issuing 5,593,334 shares at $Aus0.60 to sophisticated investors from the UK and clients of State One Stockbrokers and Delta Securities.

The proceeds raised through the placement will be used to embark on a program of resource expansion at the Co-O Mine, underground exploration and development at the Tambis Banaghilig and Anoling Prospects, and investigation of porphyry copper-gold targets with the Lingig Prospect receiving priority.

Medusa hopes to list on the Alternative Investment Market by the end of this year.