16th Jun 2008 14:00
AIM: GMA
GMA Resources Plc
("GMA" or "the Company")
Production and trading update
GMA announces production at Amesmessa for the months of April and May 2008.
Production for the month of April was 2,000 ounces of gold and 335 ounces of silver. In May, production was 1,327 ounces of gold and 354 ounces of silver. Given that production for March was 2,781 ounces gold and 450 ounces of silver, these results are substantially below previously expected production levels for April and May 2008.
The principal reason for the lower than expected level of production is due to a lack of access to explosives for blasting. The amount of explosives received over the April and May has been insufficient to perform at planned mining levels. The lack of explosives did not allow proper stripping of waste to get at higher grade mineralization and the Company had to rely on surface "free dig" lower grade ore.
In order to address this supply issue, the Company has been in discussions with the principal supplier of explosives in the region and has been assured that the supply issues will be resolved by a new emulsion plant which is expected to commence production in the 4th quarter of 2008 and increased efficiency at the supplier's existing operations for the supply of ANFO (ammonium nitrate and fuel oil) until emulsion is available. Procedures for requesting and delivering explosives have also been streamlined.
In the immediate term, ENOR, the Company's principal operating subsidiary, received a shipment of explosives on 12 June and will receive another shipment on 23 June 2008. The Company has also requested that the quantities be increased as of July following the completion of the explosive magazine described below.
Assuming explosives are received as expected, the Company is confident that Amesmessa gold production will recover to previously expected levels and continue its climb to feasibility study levels over the next few months. Notwithstanding this, the Company now expects revenues and earnings for the year ending 31 December 2008 to be significantly below market expectations.
To store larger inventory levels of explosive, the Company has built a 300 tonne explosives magazine at Amesmessa which is expected to be completed and ready for inspection by the end of this month. Storing a larger inventory of explosives will significantly assist the Company in performing at planned mining levels in future.
Douglas Perkins, Chief Executive Officer of GMA, commented, "The supply difficulties that we have experienced to date this year have been disappointing and frustrating; both for production progress itself, and for the team at site. We are however grateful to the Ministry of Energy & Mines personnel who have been working diligently to solve this issue and are confident that the measures we have taken will improve the situation".
This announcement has been reviewed and approved by Andre Villeneuve, P.Eng, Vice President Algeria and Country Manager of the Company, who is a qualified person for the purposes of the Guidance Note for Mining, Oil and Gas Companies for AIM companies issued by London Stock Exchange plc.
Enquiries:
|
GMA Resources Plc |
John East & Partners Limited |
Parkgreen Communications |
|
Douglas Perkins |
Bidhi Bhoma / David Worlidge |
Louise Goodeve / Justine Howarth |
|
+1 514 806 6788 |
+44 (0) 20 7628 2200 |
+44 (0) 20 7851 7480 |
Notes to Editors:
GMA owns a controlling 52% stake in ENOR spa ("ENOR"), the Algerian based operating company for the Tirek -Amesmessa project, with the remainder owned by Sonatrach, the Algerian state-owned oil and Gas Company.
ENOR holds the exploitation authorization to the Tirek-Amesmessa property, an area of some 1,417 km2, located approximately 450km south west of the city, Tamanrasset, in southern Algeria. Amesmessa is an open pit heap leach gold mine located in the extreme south of the permit area. The Tirek gold mine is located centrally in the northern third of the exploration permit area, some 60 km north of Amesmessa. Research to date suggests that the Zita Zone, which lies between Tirek and Amesmessa, offers considerable potential for the development of additional prospects amenable to open-pit mining. GMA Resources plans to quickly expand upon resources outside of the major 80km Tirek-Amesmessa fault north/south of the concession.
GMA's shares are traded on the AIM market of the London Stock Exchange (AIM: GMA). GMA currently has 354,418,493 ordinary shares in issue.
For further information on the Company, please visit: www.gmaresources.co.uk
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