5th Oct 2006 11:11
Allied Gold Limited05 October 2006 FOR IMMEDIATE RELEASE 6 October 2006 Allied Gold Limited ("the Company") ANNUAL REPORT 2006 Allied Gold Limited has published the Annual Report 2006 (the "Report"). A copyof the Report is available for a period of one month, free of charge, from Unit15, Level 1, 51-53 Kowdale Road, Welshpool, Western Australia 6106. A copy can be viewed and downloaded on the Company's website -www.alliedgold.com.au or as a link to this announcement. http://www.rns-pdf.londonstockexchange.com/rns/0064k_-2006-10-5.pdf PRINCIPAL ACTIVITIES The principal activity of the economic entity during the year was explorationfor gold and other mineral resources. This has mainly involved exploration andevaluation of the Simberi Oxide Gold Project following the acquisition of aninterest in the Simberi Mining Joint Venture and the Tabar Exploration JointVenture pursuant to the merger by Plan of Arrangement with Nord Pacific Limitedin September 2004. The Company also owns the Red Dam Gold Project in Western Australia. During theyear minimal exploration on this project was carried out. RESULTS The consolidated loss of the economic entity after providing for income tax is$1,726,071 (2005: loss $1,950,724). REVIEW OF OPERATIONS During the year the Company conducted further extensive exploration activitiesat the Simberi Oxide Gold Project as well as wider exploration of parts of theTabar Islands group. The main object of the exploration at the Simberi OxideGold Project was to support the revision to a feasibility study undertaken in2003 and underpin the delineation of additional Mineral Resources and OreReserves. This revised feasibility was completed. In March 2006 Allied Gold Limited secured a US$25 million (AUD34.3 million) loanfacility to complete its project financing package for the Company's SimberiOxide Gold Project. The loan funds together with a hedging facility of up to250,000 ounces of gold were secured through RMB Resources Limited. The loan facility is in addition to a total of more than AUD50 million raised innew capital by Allied Gold this year to take Simberi through to projectcommissioning in the third quarter of next year. Allied was one of the first companies with a new, previously undeveloped miningproject in Papua New Guinea, to dual list on London's Alternative InvestmentMarket and ASX. During the year the Optimised Feasibility Study that had been completed wasadopted by the Allied board and an engineering group (Intermet Engineering) wereidentified and awarded the engineering and design work. Updated pitoptimisations and pit designs were carried in the first half of the yearutilizing gold price inputs of between USD350 - USD550 per ounce. In conjunctionwith recent drilling undertaken at Sorowar East and West there had been asignificant increase in Ore Reserves and Mineral Resources scheduled for miningwithin designed pits from 660,000 contained ounces to 785,000 contained ounces.This has resulted in an increase in recovered ounces from 585,000 ounces to692,000 ounces after application of process recoveries. A later process review and the additional pit optimisations resulted in animproved design and throughput increase to an optimised 2.2 Mtpa plant and thisresulted in an increase in project capital construction and owners andpre-production costs from USD43.7 million to USD60 million. The improved designhas allowed for an aerial conveying system to transport ore from the remote openpit mines to the process plant site located on the coast and has replaced theOFS ore delivery method of piping the ore as a slurry. Allowances in the plantdesign will enable potential future increases above the name plate capacity. The updated capital and operating costs estimates incorporating the aerial ropeconveyor and increased ore throughput capacity to 2 Mtpa will form the controlbudget for the project construction. Equipment for early start earthworks hasbeen mobilised to site with preliminary activities commencing in the secondquarter of the year. Project support infrastructure works commenced and are ongoing to enable startof the main construction phase of project development later this calendar year. At the Red Dam Gold Project in Western Australia minimal exploration activitiesin the period were conducted. As a result of the Nord acquisition the Company has acquired ownership of theMapimi exploration project in Mexico. This is a poly-metallic prospect. Duringthe year only a preliminary review of this prospect was undertaken. Financial Position The net assets of the economic entity have increased by $64,395,599 from 30 June2005 to $84,991,269 in 2006. This increase has largely resulted from theextensive capital raising undertaken by the economic entity throughout thefinancial year. The funds raised are being used to further develop the Simberi Oxide GoldProject. SUBSEQUENT EVENTS On the 28th July 2006 the company stated that in conjunction with its designEPCM Engineer, Intermet Engineering Limited ("Intermet") an updated Capital andOperating cost estimate for the Simberi Oxide Gold Project has now beencompleted. The review and optimisation resulted in an increase in project capitalconstruction and owners and pre-production costs from US$43.7 million to US$60million. An increase of up to 10% has been achieved in name plate plantthroughput. Following an unsolicited approach, Allied has entered into a Memorandum ofUnderstanding with a large international gold mining company whereby, subject tocertain conditions the Subscriber has agreed to subscribe for 30,213,471 fullypaid ordinary shares, representing 10% of the fully diluted issued capital ofAllied, at an issue price of not less than AUD$0.60 per share or at such higherprice as agreed by the parties. FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES The company is proceeding with the full development of the Simberi Oxide GoldProject with a 2.0 mtpa plant currently being constructed with the associatedinfrastructure underway. Mine production is scheduled at 84,000 ounces of goldper annum. Scheduled gold production is due to commence in the third calendarquarter 2007. It is anticipated that an accelerated exploration programme willbe undertaken to convert known resource ounces into reserve ounces. For enquiries in connection with the above, please contact: Mark Caruso Chairman and Managing Director Allied Gold Limited + 61 8 9353 3638 [email protected] Roland Cornish Beaumont Cornish Limited 020 7628 3396 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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