7th Oct 2008 14:53
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7 October 2008 |
AIM: GMA |
GMA Resources Plc
("GMA" or "the Company")
Production and trading update
GMA announces production at Amesmessa for the months of August and September.
Production for the month of August was 1,404 ounces of gold and 290 ounces of silver. In September, production was 1,950 ounces of gold and 350 ounces of silver. These results remain below management expectations, which were almost double the actual production for the months of August and September.
The supply of explosives continues to be a primary factor affecting productions results. However, the Company is pleased to announce that government approval to use its 300 tonne explosives magazine at Amesmessa was received on 4 October 2008. The Ministry of Energy & Mines has now instructed the state-owned explosives supplier to deliver the needed explosives to Amesmessa in a timely fashion.
With the approval of the explosives magazine, the Company expects that supply will improve, directly improving production. The Company continues to make every effort to secure the reliable, long-term supply of explosives for its production needs. In August, the Company received 43 tonnes of explosives and in September it received 41 tonnes. To achieve planned production levels, GMA requires approximately 120 tonnes of explosives per month.
In order to satisfy its short and medium term working capital requirements, the Board continues to pursue a range of fundraising options. As announced in the Company's interim results, it is currently negotiating the sale of its exploration drill rig to a third party, who, as part of the transaction, will take over the drill and provide ENOR with drilling services. Taking into account the proceeds of the sale of the drill rig, which are expected to be received in December 2008, the Directors believe that the Company has sufficient cash resources to fund its operations until the end of February 2009. The Board continues to make every effort to reduce expenses and conserve its cash resources until higher production levels can be sustained on an ongoing basis. Douglas Perkins, Chief Executive Officer of GMA, commented:
"The production results at Amesmessa continue to disappoint, however, the approval of the explosives magazine and the delivery of required explosives will turn ore into gold quickly. We have been fine tuning the operation over the past few months with the struggle to secure production without adequate supplies of explosives. As one can imagine, we have considerable stripping to do.
At this point in time, I would like to express my gratitude to the Ministry of Energy & Mines who took this issue to heart and went the extra mile for us. Precious metal mining is new to Algeria and we hope to be the vanguard going forward."
Enquiries:
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GMA Resources Plc |
John East & Partners Limited |
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Douglas Perkins |
Bidhi Bhoma / David Worlidge |
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+1 514 806 6788 |
+44 (0) 20 7628 2200 |
Notes to Editors:
GMA owns a controlling 52 per cent 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 of 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 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 plans to expand upon resources outside of the major 80km north/south Tirek-Amesmessa fault and other exploration targets on the property.
For further information on the Company, please visit: www.gmaresources.co.uk
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