9th Oct 2006 15:34
Allied Gold Limited09 October 2006 FOR IMMEDIATE RELEASE 9 October 2006 ALLIED GOLD LIMITED ("the Company") FURTHER GOLD INTERCEPTS EXTEND POTENTIAL OF ALLIED GOLD'S US$60M PNG PROJECT Paste the following link into your web browser to download the PDF document related to this announcement: http://www.rns-pdf.londonstockexchange.com/rns/1778k_-2006-10-9.pdf DRILLING / SAMPLING UPDATE - SIMBERI GOLD PROJECT, PNG Further strong drilling intercepts have extended the resource potential for aUS$60 million offshore Papua New Guinea gold project being developed by ASXlisted Allied Gold Limited (ASX code "ALD") and due to move to first productionfrom third quarter next year. The extension focuses on a potential new ore body south of the planned mainproduction target at Sorowar, on Simberi island, offshore north Papua NewGuinea. Allied Gold announced today that it had now completed 85 of a 100-hole shallowreverse circulation (RC) drilling program to determine the lateral and verticalextent of oxide and sulfide gold mineralisation at Pigicow, south of Sorowar. Highly encouraging intercepts were recorded as follows: PIGICOW • 56m at 2.71 g/t gold from surface in RC1317 (hole ended in mineralisation)• 45m at 2.34g/t gold from surface in RC1314 (hole ended in mineralisation)• 30m at 2.82g/t gold from surface, including 19m from surface at 3.93g/t gold in RC1340 (hole ended in mineralisation)• 30m at 1.69g/t gold from surface, including 19m at 2.20 g/t gold from 11m in RC 1336 (hole ended in mineralisation)• 30m at 1.16g/t gold from surface, including 22m at 1.42g/t gold from 8m in RC1298 (hole ended in mineralisation)• 29m at 1.36g/t gold from surface in RC1328 (hole ended in mineralisation)• 21m at 1.38g/t gold from surface, including 6m from surface at 4.11g/t gold in RC1349 (hole ended in mineralisation)• 21m at 1.05g/t gold from surface, including 11m at 1.98g/t gold from 10m in RC1301 (hole ended in mineralisation)• 20m at 1.21g/t gold from surface in RC1339 (hole ended in mineralisation) Assay results for the first tranche of 31 holes from Pigicow were reported inthe Quarterly Report for the Period Ending 30 June 2006. The above Assay resultswere recently received for the second tranche of 54 holes, totalling 1527 metresfor an average drillhole depth of 28.3 metres. New assay results received for the latest tranche of 54 holes, totalling 1527metres for an average drillhole depth of 28.3 metres, revealed from the Samattarget: SAMAT • 30m at 3.48g/t gold from surface, including 18m at 5.28g/t gold from 12m and 1m at 23.70g/t gold from 28m in RC1360• 28m at 1.30g/t gold from surface, including 1m at 29.7g/t gold from 10m in RC1368• 11m at 1.91g/t gold from 4m in RC1365• 6m at 1.44g/t gold from 5m in RC1361• 3m at 1.19g/t gold from surface, 4m at 1.78g/t gold from 8m and 2m at 1.27g/t gold from 16m in RC1369 ADORA At the nearby Adora target, east of Samat, intersections included: • 13m at 2.29g/t gold from 37m and 5m at 5.03g/t gold from 43m in RC1354• 5m at 1.07g/t gold from 20m and 3m at 1.21g/t gold from 38m in RC1357• 10m at 1.15g/t gold from 18m in RC1358• 5m at 1.20g/t gold from 23m in RC1359 The latest results follow last month's announcement by Allied Gold that one ofthe largest gold producers in China - Zijin Mining Group Co. Ltd, a Hong Konglisted producer capitalised at in excess of US$5.3 billion - had entered aconditional Memorandum of Understanding (MOU) with the Australian golddeveloper. The MOU provides for Zijin to take a direct 10% stake in Allied Gold via an A$18million share placement along with a pre-emptive right to the gold oxide onlyupside of the Simberi project. Located near Lihir off the PNG north coast, Simberi is due to pour its firstgold in the third quarter of next year, with Allied fully financed through tocommissioning. Under the terms of the Allied-Zijin agreement and on successful completion ofdue diligence: • Zijin will subscribe for 30.2 million fully paid ordinaryshares in Allied at a cost of not less than A$0.60 per share, or, at such higherprice as agreed by the parties • This currently represents 10% of the fully diluted issuedcapital of Allied of 272 million shares and 30.2 million listed and unlistedoptions • The cost to Zijin for the entry into Allied will be aboutA$18.2 million • In the event that Allied elects to dispose or assign any ofits interest in the Simberi Gold Oxide Project only, Zijin will be offered firstright of refusal • Allied shareholders approving the agreement. Allied Gold has current Oxide/Sulphide Gold Resources at Simberi of 2,344,000ounces of gold including 759,000 oxide and transitional gold reserves andmineral resources within designed pits. The Company has committed >US$60 million to the development of a 2.2 million tpacarbon in leach gold processing plant and associated infrastructure on SimberiIsland. It is anticipated the mine will produce an average of 84,000 ounces ofgold per annum over the current mine life of 8.2 years. To the end of August 2006, the company had completed 85 holes of a 100-holeshallow reverse circulation (RC) drilling program designed to determine thelateral and vertical extent of both oxide and sulfide gold mineralization atPigicow located mid-way between the Samat and Botlu deposits. Highly encouraging intercepts were recorded as follows: PIGICOW • 56m at 2.71/t gold from surface in RC1317• 45m at 2.34g/t gold from surface in RC1314• 30m at 2.82g/t gold from surface, including 19m from surface at 3.93g/t gold in RC1340• 30m at 1.69g/t gold from surface, including 19m at 2.20 g/t gold from 11m in RC 1336• 30m at 1.16g/t gold from surface, including 22m at 1.42g/t gold from 8m in RC1298• 29m at 1.36g/t gold from surface in RC1328• 21m at 1.38g/t gold from surface, including 6m from surface at 4.11g/t gold in RC1349• 21m at 1.05g/t gold from surface, including 11m at 1.98g/t gold from 10m in RC1301• 20m at 1.21g/t gold from surface in RC1339 Assay results for the first tranche of 31 holes were reported in the QuarterlyReport for the Period Ending 30 June 2006. The above Assay results have now beenreceived for the second tranche of 54 holes, totaling 1527 metres for an averagedrillhole depth of 28.3 metres. SAMAT • 30m at 3.48g/t gold from surface, including 18m at 5.28g/t gold from 12m and 1m at 23.70g/t gold from 28m in RC1360• 28m at 1.30g/t gold from surface, including 1m at 29.7g/t gold from 10m in RC1368• 11m at 1.91g/t gold from 4m in RC1365• 6m at 1.44g/t gold from 5m in RC1361• 3m at 1.19g/t gold from surface, 4m at 1.78g/t gold from 8m and 2m at 1.27g/t gold from 16m in RC1369 The above Assay results were received for 18 shallow RC drillholes recentlycompleted at the Samat deposit, totaling 545 metres for an average drillholedepth of 30.3 metres. ADORA • 13m at 2.29g/t gold from 37m and 5m at 5.03g/t gold from 43m in RC1354• 5m at 1.07g/t gold from 20m and 3m at 1.21g/t gold from 38m in RC1357• 10m at 1.15g/t gold from 18m in RC1358• 5m at 1.20g/t gold from 23m in RC1359 The above Assay results were also received for 6 shallow RC drillholes recentlycompleted at the Adora Prospect Deposit, immediately east of Samat. Thispreliminary program totalled 268 metres for an average drillhole depth of 44.7metres. The location of the Pigicow and Adora areas in relation to the Botlu, BekouCreek and Samat deposits as well as the proposed Process Plant Site is shown inthe attached pdf. Revised resource estimates are currently being compiled for the Bekou Creek andPigicow areas and these will be finalized in the near future, once the third andfinal tranche of results is received from the recently completed Pigicowdrilling program. The Pigicow drillhole location map is shown in the attachedpdf. A more detailed tabulation of the second tranche drilling results follows: PIGICOW GOLD ASSAY RESULTS AND DRILLHOLE DETAILS: Hole TIG Dip / From To Intercept Au Grade Oxidation Co-ordinates Azimuth mN mE (m) (m) (m) (g/t) RC1298 208009 44119 -60/180 0 30 30 1.16 OX, TR, SU 0 3 3 0.96 OX 8 30 22 1.42 TR, SU RC1299 208084 44134 -90/000 0 21 21 0.05 OX, SU RC1300 208105 44108 -90/000 0 25 25 0.03 OX, SU RC1301 208130 44170 -90/000 0 21 21 1.05 OX, SU 10 21 11 1.98 SU RC1302 208039 44186 -90/000 0 21 21 0.08 OX, TR, SU 6 7 1 0.83 TR RC1303 208014 44074 -90/000 0 30 30 0.05 OX, TR, SU RC1304 207954 44114 -90/000 0 29 29 0.34 OX, TR, SU 0 2 2 0.74 OX 6 10 4 0.69 OX 20 21 1 0.69 SU RC1305 207954 44114 -90/000 0 38 38 0.39 OX, SU 13 20 7 0.82 OX 33 37 4 0.53 SU RC1306 207944 43979 -90/000 0 20 20 0.19 OX, TR, SU 10 11 1 0.91 SU RC1307 207954 43934 -90/000 0 31 31 0.01 OX, TR, SU RC1308 207954 43934 -90/000 0 20 20 0.01 OX, TR RC1309 207914 43934 -90/000 0 23 23 0.84 OX, TR, SU 3 11 8 1.91 OX, TR, SU 17 18 1 0.72 SU RC1310 207914 43894 -90/000 0 21 21 0.33 OX, TR,SU 10 12 2 1.61 SU RC1311 207914 43894 -90/000 0 20 20 0.08 OX, TR,SU RC1312 207880 43943 -90/000 0 25 25 0.01 OX, SU RC1313 207900 43877 -90/000 0 36 36 0.48 OX, TR, SU 4 5 1 0.89 OX 28 36 8 1.67 SU RC1314 207878 43852 -90/000 0 45 45 2.34 OX, TR, SU 2 45 43 2.43 OX, TR, SU RC1315 207803 43983 -90/000 0 27 27 0.04 SU, TR RC1316 207825 43933 -90/000 0 35 35 0.01 SU, TR RC1317 207739 43939 -60/226 0 56 56 2.71 OX, TR, SU 5 56 51 2.96 OX. TR, SU RC1318 207734 43904 -60/046 0 27 27 0.07 OX, TR, SU RC1319 207724 43874 -60/046 0 42 42 0.07 OX, TR, SU RC1320 207754 43839 -60/046 0 36 36 0.29 OX, TR, SU 4 7 3 0.70 OX 17 19 2 0.78 OX 35 36 1 1.19 OX RC1321 207686 43845 -90/000 0 29 29 0.04 OX, TR, SU RC1322 207674 43949 -60/046 0 30 30 0.25 OX, TR, SU 0 5 5 1.23 OX RC1323 207665 43962 -60/046 0 30 30 0.11 OX, TR, SU 5 6 1 0.69 OX RC1324 207759 44004 -90/000 0 30 30 0.04 OX, TR, SU RC1325 207733 43989 -60/226 0 25 25 0.33 OX, TR, SU 7 15 8 0.84 OX, TR, SU RC1326 207707 43974 -60/046 0 25 25 0.38 OX, SU 0 2 2 2.78 OX RC1327 207686 43940 -60/046 0 25 25 0.04 OX, SU RC1328 207703 43906 -60/046 0 29 29 1.36 OX, TR, SU 0 4 4 0.99 OX 7 27 20 1.69 OX, TR, SU RC1329 207627 43850 -90/000 0 30 30 0.12 OX, TR, SU 5 6 1 0.69 OX 22 23 1 0.50 SU RC1330 207561 43866 -90/000 0 29 29 0.01 OX, SU RC1331 207670 43885 -90/000 0 25 25 0.06 OX, TR, SU 14 15 1 0.60 SU RC1332 207639 43811 -90/000 0 30 30 0.12 OX, TR, SU 0 1 1 0.51 OX RC1333 207665 43814 -90/000 0 25 25 0.26 OX, TR, SU 17 21 4 1.04 SU RC1334 207686 43796 -90/000 0 25 25 0.05 OX, TR, SU 16 17 1 0.61 SU RC1335 207709 43748 -90/000 0 30 30 0.58 OX, SU 1 3 2 2.44 OX 11 12 1 0.79 SU 21 30 9 0.95 SU RC1336 207700 43742 -90/000 0 30 30 1.69 OX, TR, SU 0 4 4 1.72 OX 11 30 19 2.20 TR, SU RC1337 207754 43758 -90/000 0 30 30 0.65 OX, TR, SU 0 17 17 0.77 OX, TR, SU 24 30 6 0.83 SU RC1338 207710 43774 -90/000 0 28 28 0.48 OX, SU 9 13 4 0.73 OX, SU 20 28 8 0.92 SU RC1339 207986 43815 -90/000 0 20 20 1.21 OX, SU 0 16 16 1.49 OX, SU RC1340 207976 43786 -90/000 0 30 30 2.82 OX, SU 0 19 19 3.93 OX, SU 22 28 6 1.41 SU RC1341 207979 43787 -60/180 0 25 25 0.30 OX, TR, SU 12 16 4 1.04 SU 24 25 1 1.15 SU RC1342 207955 43756 -60/000 0 36 36 0.68 OX, TR, SU 4 8 4 0.99 OX 17 30 13 1.35 OX, TR, SU RC1343 207917 43653 -60/000 0 26 26 0.05 OX, TR, SU RC1344 207904 43636 -90/000 0 30 30 0.02 OX, SU RC1345 207901 43635 -60/180 0 31 31 0.09 OX, TR, SU RC1346 207944 42688 -60/000 0 25 25 0.06 OX, SU RC1347 207947 42688 -60/000 0 26 26 0.03 OX, TR, SU RC1348 207983 43721 -60/180 0 22 22 0.03 OX, TR, SU RC1349 207985 43722 -60/000 0 21 21 1.38 SU 0 6 6 4.11 SU 14 21 7 0.54 SU RC1350 208105 44108 -90/000 0 20 20 0.18 OX, SU RC1351 207844 43829 -60/226 0 31 31 0.26 OX, SU 0 1 1 0.59 OX 27 31 4 1.10 SU Note: Assaying for gold by fire assay (50gm) with AAS finish (ALS ChemexLaboratories - Townsville, Queensland) Simberi mineralization types are: Ox = oxide material - extremely weathered (average cyanide recovery >90%) Tr = transitional material - distinctly weathered (average cyanide leachrecovery 50 - 90%) Su = sulfide material - slightly weathered to fresh (average cyanide leachrecovery 90%) Tr = transitional material - distinctly weathered (average cyanide leachrecovery 50 - 90%) Su = sulfide material - slightly weathered to fresh (average cyanide leachrecovery 90%) Tr = transitional material - distinctly weathered (average cyanide leachrecovery 50 - 90%) Su = sulfide material - slightly weathered to fresh (average cyanide leachrecoveryRelated Shares:
ALD.L