Medusa Mining Ltd. of Australia upgraded its resource estimate for the Co-O gold project at the eastern end of the mine in Agusan del Sur.
In a report, Medusa, through local operating firm Philsaga Mining Corp., said the indicated resource at the mining area was increased by 16 percent to 715,000 ounces gold from 616,000 ounces. The estimate upgrade indicated the increasing confidence of mining firms in key mining areas in the country. The indicated resource will now be used to estimate the new probable reserve, the company said. In a statement, Medusa managing director Peter Hepburn-Brown said the step-out drilling strongly supported future resource additions as the mineralized system remained open in all directions. Step-out drilling involves making holes to intersect a mineralized structure horizontally or otherwise. The deepest ore grade intersection reached to date is at 1,073 meters below surface.
Drilling is scheduled to continue with the aim of raising the resource level to about 2.5 million ounces by next year. After that, “the on-going drilling programs will be tailored to replace, at a minimum, mined ounces each year to maintain the resource base,” Brown said.
Drilling had taken up where the July 27, 2011 resource model left off and the latest resource model is based on data available as of June 30, 2012, Medusa said.
The veins are open at depth, to the east and to the west. The updated resource model stretches over a strike length of about two kilometers, “demonstrating excellent potential to add more resources in future years,” the company said. The strike is the horizontal direction of a mineralized rock formation or vein.
It should be emphasized that a significant number of step-out drill hole intersections reported since July 7, 2011 cannot be incorporated into the resource estimate because the spacing of drilling is still too wide along the horizontal and downward angle.
The number of veins in the Co-O vein system is expanding and, due to the increasing diversity of vein types and grade variability between veins, the company said it introduced a new cut-off content for gold, which increased the global resource grade to 10.1 grams per ton gold from 9.6 grams per ton.