25th Sep 2006 09:19
Allied Gold Limited25 September 2006 FOR IMMEDIATE RELEASE 25 September 2006 ALLIED GOLD LIMITED ("Allied" or the "Company") MEMORANDUM OF UNDERSTANDING -SUBSCRIBER Placement The Board of Allied Gold Limited (Allied) is pleased to advise that following anunsolicited approach it has entered into a Memorandum of Understanding (MOU)with a large international gold mining company ("Subscriber") whereby, subjectto certain conditions the Subscriber has agreed to subscribe for 30,213,471fully paid ordinary shares, representing 10% of the fully diluted issued capitalof Allied, at an issue price of not less than AUD$0.60 per share or at suchhigher price as agreed by the parties. The subscription of shares by the Subscriber and determination of the finalissue price is subject to a 45 day due diligence period (or such longer periodas may be agreed) and the receipt of Allied shareholder approval in accordancewith ASX Listing Rule 7.1. Allied will convene and hold a general meeting within45 days of the Subscriber successfully completing its due diligence. Future co-operation Allied and the Subscriber have also agreed to consider ways of futureco-operation which include (without limitation) working towards theestablishment of a 50/50 joint venture company for future mining and resourcebased acquisition, development and investment opportunities. Under the proposedjoint venture which is subject to formal agreement the Subscriber will beentitled to management and operational control. The Subscriber has extensive experience and in house technical and managementresources with a proven track record in developing and operating low costgold-copper and base metal mining operations. In addition, in the event thatAllied should decide to dispose or assign any of its interest in the SimberiGold Oxide Project, located on ML 136 it must first offer that interest to theSubscriber upon the same commercial terms. Summary The proposed strategic investment by the Subscriber reflects the quality of theCompany's Simberi Oxide Project and its future potential. Allied has currentOxide / Sulphide Gold Resources of 2,344,000 ounces of gold including 759,000oxide and transitional gold reserves and mineral resources within designed pits.The Company has committed USD$60 million to the development of a 2,2 million tpaCIL gold processing plant and associated infrastructure on Simberi Island whichwill produce an average of 84,000 ounces of gold per annum over the current minelife of 8.2 years. First gold production is scheduled for the third quarter of2007. The Board of Allied looks forward to working with the executive and technicalrepresentatives of the Subscriber in order to satisfy the due diligencecondition and to proceed with the placement in a timely manner. A further announcement will be made when the subscription proceeds which willprovide full details of the subscription, together with the identity ofSubscriber. For enquiries in connection with this release please contact: Mark CarusoChairman and Managing DirectorAllied Gold Limited+61 8 9353 3638 telephone+61 8 9353 4894 [email protected] email This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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