27th Mar 2008 08:02
Allied Gold Limited27 March 2008 27 March 2008 "This press release is not for dissemination in the United States and shall not be disseminated to United States news services." BARRICK GOLD INVESTS UP TO $35 MILLION IN ALLIED GOLD EQUITY AND TABAR ISLANDS REGIONAL EXPLORATION JOINT VENTURE Highlights •Letter of Intent signed with Barrick Gold Corporation (Barrick), the world's largest gold producing Company •Barrick to individually fund up to AUD$20 million in order to gain a 70% interest in the exploration licence that encompasses Big Tabar and Tatau Islands •Barrick will subscribe for 17,647,059 fully paid ordinary shares in Allied Gold at $0.85 per share upon execution of the Letter of Intent, thereby injecting AUD$15 million into Allied Gold Allied Gold Limited ("Allied Gold" or "the Company"), the ASX and AIM listedgold producer with assets on the Tabar Islands near Papua New Guinea, todayadvises that the Company has signed a Letter of Intent ("LoI") with a whollyowned subsidiary of the world's largest gold mining company Barrick GoldCorporation ("Barrick"). Contained in the LoI is an agreement for Barrick toacquire up to a 70% interest in exploration licence 609 on Big Tabar and TatauIslands, part of the Tabar Island Group Project, through a Farm-in and JointVenture. Barrick is required to sole fund AUD$8 million of exploration expenditure withinfour years to earn a 51% interest, with another AUD$12 million required withinthe next four year period to earn 70% in the exploration licence. Barrick has committed to a minimum expenditure of AUD$2 million in the first twoyears, but has budgeted to spend US$2.1 million in year one. If Barrickwithdraws at any time after it has met the minimum expenditure but before itearns 51% equity in the joint venture, it will not retain any interest in theexploration licence. Additionally, upon execution of the Letter of Intent, Barrick will subscribe for17,647,059 shares at $0.85, representing 4.7% of the then enlarged share capitalof the Company, and thereby injecting AUD$15 million into Allied Gold. Theshares issued to Barrick will be subject to voluntary escrow for a period of 24months after the issue of shares or upon the date that Barrick meets the MinimumExpenditure as set out under the Terms of the LoI. An application will be made for the 17,647,059 new shares to be admitted totrading on AIM once the Letter of Intent is signed and Barrick subscribes forthe shares which is expected to happen shortly. The execution of the agreement provides for a significantly more expedientmanner to further explore, evaluate and exploit the exploration potential onTatau and Big Tabar islands, whilst Allied focuses on optimising performance ofits recently commissioned Simberi Gold Project. Allied Gold Executive Chairman Mark Caruso commented today saying, "the Companyis unlikely to be able to provide the means required to systematically assessthe vast potential of the other islands for the next three to five years, asthere is so much more potential to be unlocked at Simberi." "We now have a gold mining operation to manage, some 1,750,000 ounces ofmeasured, indicated and inferred mineral resources on Simberi island that arecurrently outside of ore reserve status, and numerous ore-grade intercepts anddrill targets to follow up on," Mr Caruso added. "We warmly welcome Barrick as both a shareholder and JV partner. I am confidentwe have secured the best result for our shareholders. Barrick has theexploration expertise, financial resources and zeal to assess the potential ofthe Tatau and Big Tabar islands in a timely fashion". For enquiries in connection with this release please contact: Mark Caruso, Executive Chairman, Allied Gold Limited+ 61 8 9353 3638 Roland Cornish, Beaumont Cornish Limited+ 44 207 628 3396 Edward Portman, Conduit PR+ 44 207 429 6607 Competent Persons The information in this Stock Exchange Announcement that relates to projectfinancial modelling, mining, exploration and metallurgical results, togetherwith any related assessments and interpretations, has been approved for releaseby Mr. R. Hastings, MSc, BSc., M.Aus.I.M.M., a qualified geologist and full-timeemployee of the Company. Mr Hastings has sufficient experience which is relevantto the style of mineralisation and type of deposit under consideration and tothe activity which he is undertaking to qualify as a Competent Person as definedin the 2004 Edition of the "Australasian Code for Reporting of ExplorationResults, Mineral Resources and Ore Reserves". Mr Hastings consents to theinclusion of the information contained in this ASX release in the form andcontext in which it appears. The information in this Stock Exchange Announcement that relates to Ore Reserveshas been compiled by Mr J Battista of Golder Associates who is a Member of theAustralasian Institute of Mining and Metallurgy. Mr Battista has had sufficientexperience in Ore Reserve estimation relevant to the style of mineralisation andtype of deposit under consideration to qualify as a Competent Person as definedin the 2004 Edition of the "Australasian Code for Reporting of ExplorationResults, Mineral Resources and Ore Reserves". Mr Battista consents to theinclusion of the information contained in this ASX release in the form andcontext in which it appears. Background Allied Gold is an emerging gold producer having commissioned its 100 percentowned Simberi Oxide Gold Project in February 2008. The project is situated onthe northern most island of the Tabar Islands Group, located in the New IrelandProvince of eastern Papua New Guinea some 60 kilometres north-west of the LihirGold Project, which hosts a 40 million ounce gold resource. Simberi hosts measured, indicated and inferred mineral resources ofapproximately 2.4 million ounces of gold and proven and probable ore reserves of674,000 ounces of gold. Allied's strategy is to add to the gold inventory on Simberi Island with a viewto expanding annualised gold production from current levels of 84,000 ounces andto generate and drill test gold and base metals targets identified on the nearbyTatau and Big Tabar islands. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
ALD.L