24th Feb 2009 09:44
For immediate release 24 February 2009
ALLIED GOLD LIMITED
("ALLIED" OR "THE COMPANY")
SUCCESSFUL PLACEMENT TO RAISE $30.75m
Oversubscribed placement of 61.5 million shares to raise AUD$30.75 million
Funds to be used for early debt retirement of original Simberi Project Financing
Engineering firm to start 100,000ozpa Sulphide Expansion feasibility study
Fast tracking of Oxide Plant optimisations to further reduce costs and enhance throughput
Simberi exploration program to be accelerated
Operations continue to meet management forecasts with record monthly gold sales in January 2009
The Board of Allied Gold is pleased to advise that it is finalising placement of 61,649,000 new Ordinary Shares at AUD$0.50 to raise approximately AUD$30.75M. The placement, representing approximately 15% of the Company's shares on issue prior to the placement will be made to sophisticated investors. The placement falls within the company's 15% placement capacity as set out in ASX Listing Rule 7.1
Subscribers to the placement include many existing institutional shareholders, predominately based in the UK, and two global institutional gold funds which are new to the Allied Gold share register. Allied Gold continues to attract to its share register high calibre institutional investors, reflecting continued confidence in the quality of the underlying assets and management of the company.
The 61,649,000 new Ordinary Shares will rank, pari passu, with all existing ordinary shares, and trading of the Shares on AIM is expected to commence on 2 March 2009. This brings the total Ordinary Shares in issue to 472,643,276.
The placement was managed by Allied Gold in conjunction with Mirabaud Securities in the UK and Evans and Partners in Australia. The placement was significantly over subscribed, reflecting strong investor confidence in Allied Gold's Simberi Gold Project and the positive outlook for the gold sector.
The proceeds of the placing will be used to fund several initiatives at Simberi, as detailed in the December 2008 quarterly activities report, namely to:
Early retirement of the original Simberi Oxide project financing debt facility.
Accelerate the feasibility study for the Simberi Island sulphide expansion initiative being considered by Allied Gold.
Continue to accelerate the drilling program relating to the sulphide expansion feasibility as well as other existing exploration programs with the purchase of additional drilling rig equipment.
Commence capital initiatives to optimise the gold production process and throughput and reduce the operating costs of the operation.
Update on Operating Activities
Over the months of January and February Allied Gold has continued to produce gold in line with the expected production profile. Gold sales in January achieved a company record of 8,670oz sold during the month. All sales for January were sold into the spot market realising in excess of A$1,200/oz.
Despite higher than average rain fall over the recent months, Allied Gold continues to achieve targeted mining and processing volumes, and as at 24 February 2009 remains on track to achieve the projected production target of 20,000oz for the March 2009 quarter. Cash cost projections for the current quarter also remain in line with management's expectations, as reflected in the December 2008 activity report.
Exploration updates are scheduled to occur during the March 2009 quarter. The company expects to release its 31 December 2008 half year results no later than 13 March 2009.
The strengthening of the company's balance sheet by this capital raising combined with a more consistent production base and near term organic growth profile ideally positions the company to participate and grow through a variety of avenues within the global gold sector.
Sulphide Feasibility Study:
Allied Gold is pleased to announce the appointment of GR Engineering Services to undertake a feasibility study for the Simberi Sulphide Resource. Total Simberi sulphide resources currently stand at more than 1.8M oz (Inferred, Indicated and Measured).
The study will initially focus on developing high grade resources at Pigiput Ridge. These resources, currently estimated at approximately at 485,000oz Inferred sulphide resources and 294,000oz (Inferred and Indicated) oxide resources comprise the highest grade sulphide resources identified at the Project to date. Drilling is currently underway on this prospect with 2 drill rigs with the aim of further increasing this resource.
The aim of the study is to deliver sulphide production of around 100,000oz per annum. Pending a successful feasibility study outcome, Allied Gold aims to commence gold production from sulphide resource by December 2011.
Combining the existing Oxide production profile of 80,000oz - 100,000oz p.a. with the proposed Sulphide production profile would organically generate annual production of around 180,000oz - 200,000oz p.a.
Management believes that leveraging off its existing Simberi infrastructure, combined with its proven operational experience to date, significantly de-risks its expansion initiatives.
For more information:
|
Mark Caruso Executive Chairman |
T:+61 7 93252 5911 |
|
Roland Cornish Beaumont Cornish Limited |
T: +44 (0) 20 7628 3396 |
Competent Persons
The information in this Stock Exchange Announcement that relates to Mineral Resources, Project Financial modelling, Mining, Exploration and Metallurgical results, together with any related assessments and interpretations, has been approved for release by Mr C.R. Hastings, MSc, BSc, M.Aus.I.M.M., a qualified geologist and full-time employee of the Company. Mr Hastings 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". Mr Hastings consents to the inclusion of the information contained in this ASX release in the form and context in which it appears.
The information in this Stock Exchange Announcement that relates to Mineral Resources has been compiled by Mr S Godfrey of Golder Associates who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Godfrey has had sufficient experience in Mineral Resource estimation relevant to the style of mineralisation and type of deposit under consideration 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". Mr Godfrey consents to the inclusion of the information contained in this ASX release in the form and context in which it appears.
Forward-Looking Statements
This press release contains forward-looking statements concerning the projects owned by Allied Gold. Statements concerning mineral reserves and resources may also be deemed to be forward-looking statements in that they involve estimates, based on certain assumptions, of the mineralisation that will be found if and when a deposit is developed and mined. Forward-looking statements are not statements of historical fact, and actual events or results may differ materially from those described in the forward-looking statements, as the result of a variety of risks, uncertainties and other factors, involved in the mining industry generally and the particular properties in which Allied has an interest, such as fluctuation in gold prices; uncertainties involved in interpreting drilling results and other tests; the uncertainty of financial projections and cost estimates; the possibility of cost overruns, accidents, strikes, delays and other problems in development projects, the uncertain availability of financing and uncertainties as to terms of any financings completed; uncertainties relating to environmental risks and government approvals, and possible political instability or changes in government policy in jurisdictions in which properties are located.
Forward-looking statements are based on management's beliefs, opinions and estimates as of the date they are made, and no obligation is assumed to update forward-looking statements if these beliefs, opinions or estimates should change or to reflect other future developments.
Not an offer of securities or solicitation of a proxy
This communication is not a solicitation of a proxy from any security holder of Allied Gold, nor is this communication an offer to purchase or a solicitation to sell securities. Any offer will be made only through an information circular or proxy statement or similar document. Investors and security holders are strongly advised to read such document regarding the proposed business combination referred to in this communication, if and when such document is filed and becomes available, because it will contain important information. Any such document would be filed by Allied Gold with the Australian Securities and Investments Commission, the Australian Stock Exchange and with the U.S. Securities and Exchange Commission (SEC).
The technical information in the Announcement was prepared under the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (JORC).
Glossary of terms used in the Announcement:
19. A 'Mineral Resource' is a concentration or occurrence of material of intrinsic economic interest in or on the Earth's crust in such form, quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories.
20. An 'Inferred Mineral Resource' is that part of a Mineral Resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and assumed but not verified geological and/or grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes which may be limited or of uncertain quality and reliability.
21. An 'Indicated Mineral Resource' is that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a reasonable level of confidence. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are too widely or inappropriately spaced to confirm geological and/or grade continuity but are spaced closely enough for continuity to be assumed.
22. A 'Measured Mineral Resource' is that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a high level of confidence. It is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are spaced closely enough to confirm geological and grade continuity.
Tonnage - An expression of the amount of material of interest irrespective of the units of measurement (which should be stated when figures are reported)
Grade - Any physical or chemical measurement of the characteristics of the Analysis (Value) material of interest in samples or product
Cut off grade - The lowest grade, or quality, of mineralised material that qualifies as economically mineable and available in a given deposit. May be defined on the basis of economic evaluation, or on physical or chemical attributes that define an acceptable product specification
Mineralisation - Any single mineral or combination of minerals occurring in a mass, or deposit, of economic interest
Others
Assay - The proportion of a particular metal (eg Au and Ag) in a sample derived by laboratory analytical techniques.
Analysis limits of detection for Au is
Simberi mineralisation types are:
Oxide - extremely weathered material (cyanide leach recoveries > 90%), 0.5 g/t Au cutoff
Transitional - distinctly weathered material (cyanide leach recoveries 50-90%), 0.5 g/t Au cutoff
Sulphide - Slightly weathered to fresh material (cyanide leach recoveries generally
Ounce - 1 troy ounce = 31.10348 grams
Tonnes - Are estimated on a dry basis and defined as a measurement of mass equal to 1000kg which is equivalent to 2204.622 pounds.
Mineral Resource estimate - An estimate of tonnage and grade (mineral content) of a deposit by a variety of techniques including geometrical classical methods and or geostatistical methods.
Related Shares:
ALD.L