Medusa is currently active in the Philippines with two projects, one involving the revival of the Dizon coppermine project in Zambales and the other in Sangon mining project in Mindanao.
The MOU provides for a six-month option period in which Medusa, at its own cost, will undertake an assessment of the project and if satisfied, exercise its option to enter into a mines operating agreement (MOA) for a 50-50 joint venture with Vulcan. The MOU also provides for Medusa to pay Vulcan a signing fee of $10,000 subject to Vulcan providing the foreign firm with an independent consultant’s report.
As operator, Medusa has a two-year period under the joint venture to establish the project’s commercial viability and if viable, to commence development of the mine.
Under the MOA, Vulcan has the right to contribute equally to all expenditures or dilute its equity on a pro-rata basis. In the event it elects to dilute its equity to less than 10 percent, Vulcan will convert its equity into a three-percent net smelter return royalty.
The Marian gold mine is located in Isabela province, northeast of Manila, and adjacent to the capital city of Santiago. It is contained within a mining and production sharing agreement application totaling 6,350 hectares.
The mining site was discovered in the 1970’s during a regional exploration program for porphyr copper mineralization. After operating for six years, the mine closed in 1984 due to reduced gold prices as well as the lack of capital to replace the shaft winding gear. Since 1984 and after the sale of the mine equipment and facilities, Vulcan has kept the project on a care and maintenance basis.
During its period of operation, Vulcan’s records show the mine have treated 264,000 tons of ore containing 63,600 ounces of gold.