Medusa Mining Announcements

Medusa Mining Limited
16 July 2007

MEDUSA MINING LIMITED
ABN: 60 099 377 849

Unit 7, 11 Preston Street
Como WA 6152

PO Box 860
Canning Bridge WA 6153

Telephone: 618-9367 0601
Facsimile: 618-9367 0602

Email: admin@medusamining.com.au
Internet: www.medusamining.com.au
MEDUSA MINING LIMITED

BAROBO MINERALISED CORRIDOR

Medusa Mining Limited ("Medusa" or the "Company"), the Australian based company
operating and developing gold mines in the Philippines, advises that it has now
received all sample results and assessments undertaken during the regional
evaluation of the northern section of tenements in the Company's portfolio. The
regional exploration initiative was referred to in the ASX announcement of 27
June 2007 as being in progress.

This work has identified the newly designated 16 kilometre long Barobo Corridor
which has a combination of features suggestive of a regional scale
mineralisation system capable of hosting several different styles of gold
deposits as well as porphyry copper-gold and related deposits. These features
include:

?the intersection of the regional scale mineralised north-north
west-trending Barobo Fault with the Lianga Bay Fault which is interpreted to
be the major focal point for the extensive Tambis area 9.5 x 7.3 kilometre
aeromagnetically defined intense argillic alteration zone;

?the prominent Barobo Fault corridor exending southwards from the Tambis
area appears to control numerous vein style and siliceous replacement gold
occurrences with high grades in outcrops and boulders in favourable host
rocks; and

?the presence of diorite and dacite intrusives exhibiting porphyry copper
style alteration and shedding associated anomalous stream sediment copper
values.

Geoffrey Davis, Managing Director of Medusa, commented:

"These results show the presence of a major mineralised system potentially
containing significant gold and copper deposits. A number of porphyry copper and
gold targets have been located along the Barobo Fault and we are now assessing
various exploration methods that will provide us with detailed data for
advancing targets to the drilling stage."
Barobo Corridor

The Barobo Corridor has been defined from remote sensing techniques including
satellite imagery, aerial photography and aeromagnetics, as well as regional
mapping, and surface sampling where appropriate. The aeromagnetics, regional
mapping, pan concentrate and surface sampling were completed by the Company. All
other information provided is historic. The Barobo Corridor is located at the
northern end of the Company's tenements.

The Barobo Corridor extends over approximately 16 kilometres (and open to the
south) straddling a major fault named the Barobo Fault that parallels the main
Philippine Rift Fault located approximately 25 km to the west.

The Barobo Fault is a significant aeromagnetic feature and is topographically
distinctive.

The Tambis regional area is located within a bullseye 9.5 by 7.3 kilometre
aeromagnetic anomaly indicative of and resulting from intense argillic
alteration. This widespread alteration has been field verified in numerous
places and is located to the south of the intersection of two regional scale
faults, the Barobo Fault and the major west-northwest trending Lianga Bay Fault
and partly straddling the Barobo Fault. The fault intersection is to the
immediate west of the Bananghilig Gold Mine.

It should be emphasised that reconnaissance field exploration to date has been
restricted to mapping and sampling of outcropping rocks on ridges and in creeks
and silica boulder trains with a large number of the outcrops being identified
as potentially mineralised. Various exploration methods are being assessed to
provide detailed regional scale data for prioritising targets for additional
work.
(i) Porphyry targets

At the northern end of the Barobo Corridor is the Sopon porphyry copper target
which consists of an altered and quartz veined diorite with visible copper
minerals. The target is associated with an area of aeromagnetic complexity
within the large intense argillic alteration anomaly. The diorite is associated
with massive sulphide skarn-style mineralisation which is not yet fully defined.
In the 1990s stream sediment sampling programme described below, one sample in a
small creek near the Sopon porphyry copper prospect recorded an anomalous value
of 124 ppm copper, and a stream sediment sample 2km to the west recorded 17.3
ppm gold.

A regional stream sediment sampling programme carried out in the 1990s over the
entire strike length of the Company's tenements by a previous explorer located
the highest regional stream sediment copper values in three creeks draining the
Bananghilig Mine area, being 1,662 ppm, 616 ppm and 530 ppm. This programme was
not systematic in that sampling was restricted to drainages accessible by road;
as a result large areas were not sampled.

The above stream sediment sampling programme post dates the large BLEG anomaly.
The BLEG survey was a systematic programme carried out specifically to target
gold.

The Sumugbong porphyry target consists of altered and quartz veined diorite
located to the west of the Alikway and Guinhalinan Prospects located in the
southern part of the Barobo Corridor. The 1990s regional stream sediment survey
referred to above also sampled in two creeks distant from and draining
southwards from this porphyry target and recorded regionally anomalalous copper
values of up 124 ppm.
(ii) Gold targets

A plethora of gold targets of several different styles have been located along
the Barobo Fault over a strike length of over 10 kilometres and still open to
the south. Pan concentrates were initially employed to delineate gold targets
but the presence of ubiquitous visible gold in all creeks has rendered pan
concentrates sampling as essentially non-discriminating, hence other regional
methods are being investigated. This is a very large area (approximately 21 by 8
kilometres), encompassing the Bananghilig Mine and Sopon porphyry target and
other prospective areas, of anomalous stream sediment BLEG gold values defined
by an earlier explorer. The area partially overlaps the extensive argillic
alteration zone. Some of the styles are:

?Silica replacement style targets in sediments: These include the
Guinhalinan Prospect and number of areas to the north of Guinhalinan where
silicification of limestones and siltstones has occurred and where outcrops
have returned up to 2.3 metres at 16.23 g/t gold and 1.85 metres at 8.86g/t
gold, and grab samples returning up to 16.94 g/t gold. The silicified zones
are commonly controlled by numerous northeast-trending structures which may
result in the development of large areas of silicification. Some of the
silicified zones are also brecciated such as south of Campagang where
outcrops have returned up 80.26g/t gold. Gold mineralisation appears to be
ubiquitous in the silicified zones, along with common lead and zinc
mineralisation in potentially commercial quantities. Copper mineralisation
has also been identified in some areas.

?Skarn style targets in limestones: Some subtle aeromagnetic anomalies
have been identified as containing skarn-style silica replacement in
limestones with gold, lead and zinc and disseminated magnetite, including in
the area slightly north east of Sumugbong Creek.

?Veins: A large number of veins have been identified commonly with a
northeast trend. The most consistent of these to date is the Alikway Vein
where high grade mineralisation (including 1.40 metres at 33.89 g/t gold,
0.5 metres at 26.41 g/t gold and 0.4 metres at 15.73 g/t gold) has been
identified over a distance of approximately 500 metres and is open in both
directions. Numerous other veins in the Alikway vicinity, particularly to
the south, have also been discovered, such as at Matanog where samples have
returned up to 0.6 metres at 24.8 g/t gold..

It should also be noted that there is a very large area of anomalous stream
sediment BLEG gold values defined by an earlier explorer covering an area of
approximately 21 by 8 kilometres in the area encompassing the Bananghilig Mine
and Sopon porphyry target and other prospective areas.

Maps and cross sections which accompany this announcement can be viewed in the
ASX version of the announcement on the Company's website:
www.medusamining.com.au
The information in the above announcement was compiled by Geoff Davis, who has
sufficient experience which is relevant to the style of mineralisation and type
of deposit under consideration and to the activity which he is undertaking to
qualify as a Competent Person as defined in the 2004 Edition of the
"Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves". Geoff Davis consents to the inclusion in the report of the
matters based on his information in the form and context in which it appears.

Enquiries:

Medusa Mining Limited +61 8 9367 0601
Geoffrey Davis, Managing Director
Roy Daniel, Finance Director

Ambrian Partners +44 (0)20 7776 6417
Richard Brown / Richard Greenfield

Bankside Consultants +44 (0)20 7367 8888
Michael Padley / Louise Davis
This information is provided by RNS
The company news service from the London Stock Exchange