31st Oct 2011 07:34
ALLIED GOLD FINANCIALS AND MD&A FOR QUARTER AND NINE-MONTHS ENDED 30 SEPTEMBER 2011
MANAGEMENT'S DISCUSSION AND ANALYSIS ("MD&A")
OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2011
Issued October 31, 2011
Unless otherwise identified, all amounts in this MD&A are expressed in United States dollars and references to "$" are to United States dollars.
HIGHLIGHTS - THREE MONTHS ENDED SEPTEMBER 30, 2011 ("September quarter")
§ Simberi (PNG)
- Production for the September quarter of 15,899 (June quarter 2011: 18,131) ounces was below budget of 18,019 ounces due to a greater number of high rainfall days than expected inhibiting access to higher grade pits, resulting in a lower grade ore being mined and milled during the quarter.
- Gross cash costs for the quarter of $1,064 per ounce were higher compared to the $822 per ounce recorded in the June quarter 2011. Key drivers of the increase were fixed costs being spread over lower production, increased maintenance costs and additional shipping and port costs due to the company's own vessel undergoing repairs in August and September. Excluding these non recurring costs and assuming a return to current LOM average production of 70,000 ounces per annum (before 3.5Mtpa oxide expansion is implemented) cash costs for the quarter would have been in line with the June quarter cash costs of $822 per ounce.
- Engineering and design work on the 3.5Mtpa oxide plant expansion continued. Materials and equipment procurement is currently ahead of schedule. Expansion is targeted for completion in the third quarter of calenadar 2012.
- Conversion of Simberi's power generation to heavy fuel oil continues to be progressed with implementation scheduled to be completed in the second quarter of calendar 2012.
§ Gold Ridge (Solomon Islands)
- Production at Gold Ridge continues to ramp up and is expected to be at the life-of-mine rates for processing, grade and recovery by December 2011. Production for the September 2011 quarter was 20,186 ounces.
- Gross cash costs for the quarter were $1,135 per ounce. It is expected that as production increases to the LOM rate of 100,000 to 110,000 ounces per annum cash costs will reduce to be in line with the forecast life of mine average gross cash cost of $850 per ounce.
- Gold Ridge commenced recognizing revenue and production costs into the statement of comprehensive income, effective from July 1, 2011.
- Recovery for the September quarter was 69.7% but is anticipated to increase to the forecast LOM average of 82% as production rates increase.
- Gold Ridge continues to undertake process and recovery optimization activities including research trials to assess the impact of introducing lead nitrate and/or additional oxygen capacity into the plant.
Ore grade increased to an average of 1.98 g/t in the September quarter from 1.19 g/t in the June quarter. The Company's commissioning strategy includes the treatment of lower grade remnant ore material from the Valehaichichi pit. Gold Ridge will start to see the benefit of higher grades due to the blending of material from the higher grade Namachamata pit late in the December 2011 quarter.
§ Exploration
- At Simberi, exploration comprised both metallurgical and exploration core drilling for the Simberi Sulphide Bankable Feasibility Study, due to be presented in 2012. A total 4,508 metres were drilled in 23 core holes with 9 holes / 1,912m drilled at Pigiput, completing the metallurgical/resource definition programme, and 14 exploration holes for 2,596m at Botlu, Pigiput East and Sorowar. A further 11 RC holes / 777m of exploration drilling were undertaken at Sorowar, Pigibo and Botlu during the quarter.
- At Gold Ridge, exploration core drilling commenced in April. Drilling is initially targeted the Charivunga Mineralised Zone, where previous operators produced significant down hole intercepts in core holes. Seven holes / 2,502 m were drilled in the June and September quarters, completing the Phase I programme. Assay results from the first 4 holes, GDC001 to GDC004, were released in August 31, 2011 (ALD Media Release: Exploration Update - Gold Ridge, Solomon Islands).
To date at Charivunga, gold mineralisation is identified over a strike length of 450m in a NE-trending corridor up to 250m wide. Gold mineralisation, intermittently present from surface, is most consistent and of better grade from approximately 200m to 300m below surface. Low grade mineralisation occurs with fine disseminated pyrite and marcasite in argillic alteration zones. Higher grades are mainly restricted to occasional steep dipping, thin pyritic and polymetallic quartz-carbonate veins.
- The Solomon Islands Ministry of Mines, Energy and Rural Electrification, issued a Letter of Intent (LoI) for its 122 km2 Avuavu Special Prospecting Licence (SPL) application on the central southern coast of Guadalcanal. The LoI grants Australian Solomon Gold (SI) Ltd a minimum 6 months to negotiate a Surface Access Agreement with local landowners, a prerequisite to the granting of full exploration rights.
§ Corporate
- Cash flow from operations for the quarter was a positive inflow of $8.4 million and operating profit after tax for the quarter was $3.8 million.
- As at September 30, 2011 the Group had a cash balance of $48.5 million (not including 4,341 ounces of gold at refinery), a decrease of $34.6 million from June 30, 2011. The reduction in cash is due primarily to purchases of plant and equipment to support the ramping up to full production at Gold Ridge and the plant expansion at Simberi. Additionally there was a build up in inventory levels at both sites during the quarter and the balance of trade and other payables reduced by $14.0 million during the current quarter. Operating cash flows are expected to be positive in the future as Gold Ridge reaches full production and as working capital levels stabilise.
- On August 16, 2011 Mr. Greg Steemson resigned as a director of the Company to pursue other interests. The Board has commenced procedures, pursuant to its Selection and Appointment policy, for the appointment of a further director to the Company.
- On September 19, 2011 the FTSE Group approved the inclusion of the Company in the FTSE All-Share and FTSE Small Cap Indices. On October 3, 2011 the Company was included in the FTSE250 index.
- On July 1, 2011 the group changed the functional currency of all entities within the group to United States dollar ("USD") from the Australian dollar ("AUD"). In the current period, there is a one-off adjustment to net assets of $1.6 million to account for the change in functional currency.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This management's discussion and analysis ("MD&A") of Allied Gold Mining Plc ("Allied Gold" or the "Company") is dated October 31, 2011 and provides an analysis of the Company's performance and financial condition for the three months and nine months ended September 30, 2011 (the "Quarter" and "Nine Months" respectively ). This MD&A should be read in conjunction with the Company's interim consolidated financial report for the three and nine months ended September 30, 2011 and the notes thereto.
The interim consolidated financial statements of Allied Gold Mining Plc and the financial information contained in this MD&A have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (EU-IFRS) and therefore comply with Article 4 of the EU IAS Regulations. Please refer to Note 2 of the Interim Consolidated Financial Report for the three and nine months ended September 30, 2011 for a summary of significant accounting policies adopted in the preparation of the financial report, including the application of merger accounting and the adoption of United States dollars as functional currency, effective July 1, 2011.
This MD&A may contain forward-looking statements that are based on the Company's expectations, estimates and projections regarding its business and the economic environment in which it operates. These statements speak only as of the date on which they are made, are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. Examples of some of the specific risks associated with the operations of the Company are set out in the company's most recent Annual Information Form ("AIF") under the section entitled "Risk Factors" and in the Company's prospectus dated June 17, 2011 under the section entitled "Risk Factors". Actual outcomes and results may differ materially from those expressed in these forward-looking statements and readers should not place undue reliance on such statements. Readers are also referred to the "Cautionary Note Regarding Forward-Looking Statements" in this MD&A.
These documents, along with others published by the Company are available under the Company's profile on the Canadian System for Electronic Document Analysis and Retrieval ("SEDAR") at www.sedar.com.
Impact of Schemes of Arrangement on this MD&A
On June 30, 2011, Allied Gold Group successfully implemented the Share and Option Schemes of Arrangement whereby Allied Gold Mining PLC became the holding company of the Group. Under the Schemes of Arrangement, shares and options of Allied Gold Limited, the former holding company of the Group, on issue as at June 30, 2011 were exchanged on a six for one basis for shares and options in Allied Gold Mining PLC. Allied Gold Mining PLC was admitted to the Main Market of the London Stock Exchange PLC ("the Main Market") with a premium listing, and commenced trading on the Main Market for listed securities on June 30, 2011. At admission, Allied Gold Mining Plc had issued capital of 199,755,017 shares and 10,172,904 options on issue.
The implementation of the Schemes of Arrangement has had the following effects on the information presented in this MD&A:
·; The Company has adopted a financial year end of December 31. Previously the Group had a financial year end of June 30. The financial information presented in this MD&A therefore relates to the financial year commencing January 1, 2011 and ending December 31, 2011.
·; Notwithstanding that the Company acquired control of the Group on June 30, 2011; the Group has applied merger accounting principles such that the information in this MD&A is presented as if the Company has been the holding company of the Group since its formation.
·; The Group is now required to comply with the requirements of International Financial Reporting Standards as adopted by the European Union (EU-IFRS). Previously the Group complied with Australian equivalents to International Financial Reporting Standards. At the time of preparation of this MD&A there were no significant differences between the two frameworks.
·; As a consequence of the restructuring the group has adopted the United States dollar as its functional currency for financial reporting purposes.
Additional information on the application of merger accounting and the change in the Group's functional currency is provided in Note 2(b) to the Company's interim consolidated financial report for the three and nine months ended September 30, 2011 and is also discussed under Significant Accounting Polices and Estimates at page 42 of this MD&A.
Overview
Allied Gold is a gold producer, developer and exploration Company whose shares are listed on the London Stock Exchange Main Market (ALD), Toronto Stock Exchange (ALD) and the Australian Securities Exchange (ALD). Allied Gold's major assets are its 100% owned Simberi gold project (the "Simberi Project"), which is located on Simberi Island, the northernmost island of the Tabar Islands Group, in the New Ireland Province of eastern PNG and its 100% interest in the Gold Ridge Gold Project ("Gold Ridge") which is located on Guadalcanal Island in the Solomon Islands.
The Simberi Project
The Simberi Project is located in the Pacific Rim of Fire, one of the world's proven and most prospective gold jurisdictions. The Simberi Project is comprised of: (i) an open-pit mining operation with an associated gold processing plant, located within PNG mining lease 136 ("ML 136"), which comprises 2,560 ha on the eastern side of Simberi Island; and (ii) a larger 69 sub-block/233 km2 area under PNG exploration license 609 ("EL 609") covering the remainder of Simberi Island and most of the adjacent Tatau and Big Tabar Islands to the south. The Simberi Project is based on seven separate deposits on the eastern portion of Simberi Island (Sorowar, Samat North, Samat South, Samat East, Pigiput, Pigibo and Botlu South). Sorowar in the north is by far the largest resource. Samat North, South and East lie to the south and while relatively small are also relatively high grade. Pigiput, Pigibo and Botlu South lie between the Sorowar and Samat areas and are of intermediate tonnage but at a grade similar to Sorowar. All prospects lie within 2-3 km of each other. The project area also includes other less well defined prospects and anomalies.
The Simberi Project is the subject of a Competent Persons' Report, entitled "Simberi Gold Project, Simberi Island, Papua New Guinea" dated June 17, 2011 prepared for Allied Gold by Stephen Godfrey and John Battista of Golder Associates Pty Ltd. and Phil Hearse of Battery Limits Pty Ltd., all of whom are independent qualified persons as defined in National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101").
The Gold Ridge Project
The Gold Ridge Project is located on the Island of Guadalcanal, the central island of the Solomon Islands, approximately 30 km south-east of the capital city Honiara. Allied Gold acquired the Gold Ridge Project in November 2009 through its acquisition of Australian Solomons Gold Limited ("ASG").
Prior to the Group acquiring the Gold Ridge Project, previous owners of the project had constructed a 2Mtpa open cut mine starting in 1997 and mined the Valehaichichi deposit commencing in August 1998. During the 22 months that the Gold Ridge mine was actively operating, the total gold production amounted to approximately 210,000 ounces. The Gold Ridge Project was shut down in September 2000 as a result of escalating civil unrest in the Solomon Islands. The Regional Assistance Mission to Solomon Islands ("RAMSI') was created in 2003 in response to a request for international aid by the Governor-General of the Solomon Islands. RAMSI is a partnership between the people and Government of Solomon Islands and fifteen contributing countries of the Pacific region. RAMSI is helping the Solomon Islands to lay the foundations for long-term stability, security and prosperity - through support for improved law, justice and security; for more effective, accountable and democratic government; for stronger, broad-based economic growth; and for enhanced service delivery. The Australian government continues to support RAMSI, contributing in excess of $200 million per annum for various development and support initiatives.
Following the completion of its acquisition of a 100% interest in the Gold Ridge Project, the Group commenced a $150 million redevelopment of the project in March 2010. One year later, in March 2011 the first gold was poured from Gold Ridge under Allied's control and in accordance with the project schedule.
The Gold Ridge Project is the subject of a Competent Persons' Report entitled "Gold Ridge Gold Project, Guadalcanal, Solomon Islands" dated June 17, 2011 prepared for Allied by Stephen Godfrey and John Battista of Golder Associates Pty Ltd. and Tony Showell of Battery Limits Pty Ltd as independent qualified person as defined in National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101").
PROJECTS
Simberi Sulphide Bankable Feasibility Study
Study continuing with roaster pilot plant testwork to be carried out in December quarter.
Exploration drilling has identified a new mineralised area at Pigiput with some significant gold sulphide intercepts. Refer to exploration section for a more detailed discussion of exploration activity and results.
It is anticipated that the study will be completed third quarter of calendar 2012. Remaining capital cost as at September 30, 2011 was estimated to be A$6 million.
Simberi Heavy Fuel Oil Conversion
HFO gensets have been ordered to provide 10.5MW installed capacity.
Geotechnical drilling of HFO tank storage site has been completed and upgrade of fuel storage facilities commenced.
Negotiations for the supply and delivery of the required quantities of heavy fuel oil to Simberi Island commenced.
It is currently anticipated that works will be completed in second quarter calendar 2012 with forecast reduction in cash costs of approximately $30 to $50 per ounce being realized in the third quarter calendar 2012.
Total estimated remaining capital cost is $20 million of which $2 million is forecast to be spent in the December quarter, and the remaining $18 million in the half-year to June 2012
Simberi Oxide Plant Expansion
Work on the expansion project is progressing with delivery of materials and equipment, commencement of civil works and strong progress in detailed engineering & design, and procurement.
It is currently anticipated that works will be completed in third quarter calendar 2012 with increased production and commensurate reduction in cash costs being realized in fourth quarter 2012.
Total estimated remaining capital cost is $34 million of which $4 million is forecast to be spent in the December quarter and approximately $30 million in the half-year to June 2012.
Works undertaken during the quarter included:
·; Owners pre-construction site work on the 3.5Mtpa oxide plant expansion focused on earthworks & foundations, and, civil site activities for the leach tanks and the SAG mill, ore reclaim and the thickener.
·; Foundation piling for SAG mill completed.
·; Civil works for leach tanks commenced. Foundation report for thickener received
·; Geotechnical drilling at the Sorowar ore reclaimer site
·; Geotechnical drilling at plant reclaimer site and at the HFO tank storage site
·; Purchase of cyclones, screens, pumps and tunnel liners
·; Conceptual engineering design for the new Sorowar ore reclaimer completed, and design of the new plant ore reclaimer completed. Tailings Tails cyanide destruction testwork completed and design criteria developed
·; Plant refurbishment has been ongoing with painting, 90% of floor grates and hand rail replacement. Internal lining of tank 3 completed and commenced refurbishment works on tank 1. Replacement core storage shed completed.
Gold Ridge Redevelopment
Capital works including explosive facility nearing completion and additional warehouses and other non critical buildings completed.
Village relocation continuing with a total of 209 new homes completed.
EXPLORATION
Simberi, PNG
At Simberi, exploration comprised both metallurgical and exploration core drilling for the Simberi Sulphide Bankable Feasibility Study, due to be presented in 2012. A total 4,508 metres were drilled in 23 core holes with 9 holes / 1,912m drilled at Pigiput, completing the metallurgical/resource definition programme, and 14 exploration holes for 2,596m at Botlu, Pigiput East and Sorowar. A further 11 RC holes / 777m of exploration drilling were undertaken at Sorowar, Pigibo and Botlu.
Sample assays were received for 26 core and 47 RC holes; collar details and down hole intercepts are presented in Table 1, Table 2, Table 3 and Table 4).
Better down-hole intercepts found at Pigiput, in resource definition / metallurgical holes included:
·; 89.2m @ 2.56g/t Au from 122m in Sulphide (SDH191)
·; 107m @ 3.33g/t Au from 140m in Sulphide (SDH196)
·; 68m @ 4.58g/t Au from 137m in Sulphide (SDH198)
·; 41m @ 6.97g/t Au from 133m in Sulphide (SDH200)
·; 52m @ 3.27g/t Au from 125m in Sulphide (SDH203)
·; 53m @ 2.66g/t Au from 151m in Sulphide (SDH211)
The holes, primarily intended to provide metallurgical samples for the Simberi Sulphide Project BFS, were designed to also increase the drill density within the Pigiput resource model area. The assay results are in-line with expectation and allow the resources classification to be reviewed when next re-estimated.
Better down-hole intercepts found at Botlu in resource definition / metallurgical holes included:
·; 28m @ 2.61g/t Au from 76m in Sulphide (SDH194)
A new resource estimate of the Botlu deposit, received at the end of the quarter, is presently under review and due for release during October. Sulphide resources at Botlu add to the mineral inventory available for the Sulphide BFS Project.
Analytical results were received for 47 RC exploration holes, targeting Oxide mineralisation, and mostly testing a previously undrilled area north of the Pigibo deposit with gold-in-surface samples anomalies. Highly encouraging results were found in several adjacent holes including better down-hole intercepts of
·; 44m @ 1.11g/t Au from surface in RC1880
·; 13m @ 1.35g/t Au from surface in RC1881
·; 11m @ 1.13g/t Au from surface in RC1884
·; 19m @ 1.19g/t Au from surface in RC1891
·; 27m @ 17.5g/t from 8m, incl 1m @ 410g/t from 24m, in RC1895
·; 25m @ 2.71g/t Au from surface and 21m @ 1.01 from 39m in RC1901
Additional RC and core drilling is planned to define the dimension and attitude of the new discovery.
Current exploration also includes core drilling at Botlu and Pigicow, a prospect on the haul road between Samat and Botlu deposits.
A breakdown of down hole intercepts received during the quarter, based on various sample gold grade assay cut-offs, is presented in and below. A description of the sampling and analytical methods used and the downhole intercept compositing practice is detailed below.
Table 1Pigibo / Pigiput, Simberi - Diamond Core Hole Collar Details
Deposit | Hole ID | TIG | TIG | RL (m) | Dip / Azi | Total | Core |
North (m) | East (m) | Length (m) | Loss (m) | ||||
Pigibo | SDH193 | 208989.9 | 43704.5 | 218.5 | -60 / 180 | 127.0 | 0.40 |
Pigibo | SDH194 | 208985.7 | 43529.6 | 244.9 | -60 / 180 | 104.4 | 0.00 |
Pigiput | SDH188 | 209064.3 | 44396.2 | 182.5 | -60 / 330 | 192.9 | 2.30 |
Pigiput | SDH191 | 209064.6 | 44396.9 | 182.5 | -80 / 360 | 211.2 | 3.50 |
Pigiput | SDH192 | 209071.0 | 44395.0 | 182.5 | -75 / 30 | 220.2 | 5.50 |
Pigiput | SDH195 | 209135.6 | 44364.9 | 194.5 | -55 / 170 | 216.5 | 2.10 |
Pigiput | SDH196 | 209063.8 | 44276.1 | 196.3 | -75 / 360 | 266.6 | 0.30 |
Pigiput | SDH197 | 209236.7 | 44466.9 | 166.4 | -65 / 240 | 271.0 | 0.70 |
Pigiput | SDH198 | 209135.5 | 44366.7 | 194.9 | -55 / 210 | 201.6 | 4.30 |
Pigiput | SDH199 | 209239.7 | 44468.0 | 166.8 | -75 / 330 | 221.7 | 2.10 |
Pigiput | SDH200 | 209237.2 | 44464.6 | 166.4 | -80 / 360 | 207.2 | 1.70 |
Pigiput | SDH201 | 209239.1 | 44465.0 | 166.4 | -75 / 225 | 211.2 | 0.70 |
Pigiput | SDH202 | 209240.7 | 44463.9 | 166.8 | -75 / 177 | 200.5 | 1.90 |
Pigiput | SDH203 | 209240.0 | 44463.9 | 166.5 | -61 / 179 | 238.9 | 7.60 |
Pigiput | SDH204 | 209080.9 | 44394.5 | 182.7 | -60 / 148 | 148.8 | 0.10 |
Pigiput | SDH205 | 209083.3 | 44395.6 | 182.8 | -65 / 123 | 154.0 | 3.50 |
Pigiput | SDH206 | 209239.8 | 44462.7 | 165.9 | -66 / 121 | 240.3 | 1.20 |
Pigiput | SDH208 | 209085.1 | 44394.5 | 182.8 | -60 / 60 | 213.8 | 2.30 |
Pigiput | SDH210 | 209240.0 | 44464.0 | 165.5 | -65 / 94 | 153.3 | 5.80 |
Pigiput | SDH211 | 209134.0 | 44361.4 | 193.8 | -55 / 137 | 227.2 | 14.70 |
Table 2Pigiput - Pigibo, Simberi - Down hole intercepts, 0.5 g/t assay cut-off in resource infill / metallurgical holes (intercept definition method described following Table 8)
Hole | From (m) | To (m) | Intercept (m) | Au Grade (g/t) | Ag Grade (g/t) | Oxidation | |
SDH193 | 0.0 | 127.0 | 0.65 | ALS_TSV | |||
33.0 | 42.0 | 9.0 | 3.10 | OX | |||
incl | 37.0 | 38.0 | 1.0 | 6.33 | OX | ||
58.0 | 67.0 | 9.0 | 1.41 | OX, TR | |||
82.0 | 92.0 | 10.0 | 1.09 | TR | |||
90.0 | 92.0 | 2.0 | 2.54 | TR | |||
122.0 | 127.0 | 5.0 | 1.93 | TR | |||
SDH194 | 0.0 | 104.4 | 1.16 | ALS_TSV | |||
22.0 | 30.0 | 8.0 | 1.39 | OX, SU | |||
incl | 24.0 | 30.0 | 6.0 | 1.61 | OX, SU | ||
53.0 | 73.0 | 20.0 | 0.90 | OX, SU | |||
incl | 67.0 | 71.0 | 4.0 | 1.63 | OX, SU | ||
76.0 | 104.0 | 28.0 | 2.61 | SU | |||
incl | 81.0 | 98.0 | 17.0 | 3.70 | SU | ||
incl | 83.0 | 84.0 | 1.0 | 8.03 | SU | ||
SDH188 | 122.0 | 192.9 | 1.39 | ALS_TSV | |||
0.0 | 122.0 | 122.0 | unsampled | ||||
loss 2.2m | 128.0 | 192.9 | 64.9 | 1.49 | SU | ||
incl | 132.0 | 166.0 | 34.0 | 1.99 | SU | ||
incl | 144.0 | 146.0 | 2.0 | 2.84 | SU | ||
and | 151.0 | 154.0 | 3.0 | 2.95 | SU | ||
loss 2.2m | and | 173.0 | 212.0 | 39.0 | 1.38 | SU | |
217.0 | 222.0 | 5.0 | 2.11 | SU | |||
incl | 219.0 | 222.0 | 3.0 | 3.01 | 64.9 | SU | |
incl | 219.0 | 220.0 | 1.0 | 5.16 | 59.4 | SU | |
234.0 | 247.0 | 13.0 | 0.88 | SU | |||
257.0 | 295.0 | 38.0 | 2.27 | SU | |||
incl | 258.0 | 271.0 | 13.0 | 4.37 | SU | ||
incl | 263.0 | 269.0 | 6.0 | 7.24 | SU | ||
incl | 268.0 | 269.0 | 1.0 | 23.8 | 18.6 | SU | |
273.0 | 285.0 | 12.0 | 1.51 | SU | |||
303.0 | 313.0 | 10.0 | 0.59 | SU | |||
Hole | From (m) | To (m) | Intercept (m) | Au Grade (g/t) | Ag Grade (g/t) | Oxidation | |
SDH191 | 122.0 | 211.2 | 2.56 | ALS_TSV | |||
0.0 | 122.0 | 122.0 | unsampled | ||||
loss 3.5m | 122.0 | 211.2 | 89.2 | 2.56 | SU | ||
loss 3.0m | incl | 132.0 | 173.0 | 41.0 | 3.51 | SU | |
incl | 132.0 | 134.0 | 2.0 | 5.10 | SU | ||
and | 140.0 | 144.0 | 4.0 | 6.38 | SU | ||
incl | 140.0 | 143.0 | 3.0 | 7.58 | 13.8 | SU | |
loss 1.2m | and | 151.0 | 155.0 | 4.0 | 4.30 | SU | |
loss 0.6m | incl | 152.0 | 154.0 | 2.0 | 6.39 | SU | |
and | 162.0 | 163.0 | 1.0 | 12.6 | SU | ||
loss 0.6m | and | 165.0 | 173.0 | 8.0 | 4.70 | 24.1 | SU |
and | 175.0 | 211.2 | 36.2 | 2.04 | SU | ||
incl | 184.0 | 188.0 | 4.0 | 5.61 | 8.7 | SU | |
incl | 186.0 | 187.0 | 1.0 | 13.7 | 11.3 | SU | |
SDH192 | 85.0 | 220.2 | 1.27 | ALS_TSV | |||
0.0 | 85.0 | 85.0 | unsampled | ||||
loss 5.5m | 119.0 | 189.0 | 70.0 | 2.15 | SU | ||
loss 1.2m | incl | 119.0 | 146.0 | 27.0 | 1.34 | SU | |
loss 4.3m | and | 149.0 | 180.0 | 31.0 | 3.34 | SU | |
loss 0.2m | incl | 153.0 | 156.0 | 3.0 | 5.27 | SU | |
incl | 154.0 | 155.0 | 1.0 | 8.38 | SU | ||
loss 3.8m | and | 159.0 | 169.0 | 10.0 | 2.33 | SU | |
and | 174.0 | 179.0 | 5.0 | 8.17 | SU | ||
incl | 174.0 | 178.0 | 4.0 | 9.54 | 16.4 | SU | |
incl | 174.0 | 175.0 | 1.0 | 19.5 | 32.2 | SU | |
and | 183.0 | 188.0 | 5.0 | 1.13 | SU | ||
201.0 | 211.0 | 10.0 | 0.74 | SU | |||
Hole | From (m) | To (m) | Intercept (m) | Au Grade (g/t) | Ag Grade (g/t) | Oxidation | |
SDH195 | 0.0 | 216.5 | 1.14 | ALS_TSV | |||
7.0 | 19.0 | 12.0 | 7.78 | OX | |||
incl | 7.0 | 17.0 | 10.0 | 9.20 | OX | ||
incl | 8.0 | 12.0 | 4.0 | 21.1 | OX | ||
25.0 | 49.0 | 24.0 | 0.88 | OX, TR, SU | |||
incl | 38.0 | 40.0 | 2.0 | 2.67 | TR | ||
loss 1.8m | 137.0 | 175.0 | 38.0 | 2.17 | SU | ||
loss 1.7m | incl | 140.0 | 148.0 | 8.0 | 3.06 | 14.1 | SU |
incl | 145.0 | 146.0 | 1.0 | 8.54 | 39.9 | SU | |
and | 160.0 | 169.0 | 9.0 | 1.66 | SU | ||
and | 171.0 | 175.0 | 4.0 | 7.69 | 14.3 | SU | |
178.0 | 197.0 | 19.0 | 1.05 | SU | |||
and | 190.0 | 194.0 | 4.0 | 1.88 | SU | ||
SDH196 | 0.0 | 266.6 | 1.97 | ALS_TSV | |||
1.0 | 15.0 | 14.0 | 0.85 | OX, TR, SU | |||
21.0 | 34.0 | 13.0 | 0.79 | TR | |||
loss 0.3m | 57.0 | 102.0 | 45.0 | 2.23 | SU | ||
incl | 61.0 | 75.0 | 14.0 | 4.13 | SU | ||
incl | 66.0 | 70.0 | 4.0 | 6.63 | SU | ||
loss 0.3m | and | 78.0 | 84.0 | 6.0 | 2.03 | SU | |
and | 87.0 | 93.0 | 6.0 | 2.35 | SU | ||
incl | 88.0 | 91.0 | 3.0 | 3.31 | 21.9 | SU | |
and | 98.0 | 102.0 | 4.0 | 1.79 | SU | ||
109.0 | 114.0 | 5.0 | 1.21 | SU | |||
gain 0.4m | 119.0 | 128.0 | 9.0 | 0.69 | SU | ||
140.0 | 247.0 | 107.0 | 3.33 | SU | |||
incl | 154.0 | 163.0 | 9.0 | 1.56 | SU | ||
and | 165.0 | 175.0 | 10.0 | 1.25 | SU | ||
and | 182.0 | 196.0 | 14.0 | 6.90 | 25.5 | SU | |
incl | 183.0 | 188.0 | 5.0 | 14.1 | 22.9 | SU | |
incl | 183.0 | 184.0 | 1.0 | 28.5 | 26.6 | SU | |
and | 184.0 | 185.0 | 1.0 | 11.8 | 28.0 | SU | |
and | 186.0 | 187.0 | 1.0 | 16.6 | 20.5 | SU | |
and | 222.0 | 242.0 | 20.0 | 9.65 | 20.8 | SU | |
incl | 224.0 | 229.0 | 5.0 | 27.9 | 52.4 | SU | |
incl | 223.0 | 224.0 | 1.0 | 97.1 | 156.0 | SU |
Hole | From (m) | To (m) | Intercept (m) | Au Grade (g/t) | Ag Grade (g/t) | Oxidation | |
and | 224.0 | 225.0 | 1.0 | 10.5 | 73.6 | SU | |
and | 228.0 | 229.0 | 1.0 | 23.3 | 18.0 | SU | |
and | 237.0 | 238.0 | 1.0 | 16.0 | 59.4 | SU | |
and | 241.0 | 242.0 | 1.0 | 17.9 | 10.7 | SU | |
258.0 | 264.0 | 6.0 | 1.17 | SU | |||
SDH197 | 0.0 | 271.0 | 1.81 | ALS_TSV | |||
153.0 | 224.0 | 71.0 | 5.77 | SU | |||
incl | 156.0 | 163.0 | 7.0 | 1.71 | 15.6 | SU | |
and | 165.0 | 223.0 | 58.0 | 6.79 | SU | ||
incl | 167.0 | 172.0 | 5.0 | 6.00 | SU | ||
incl | 169.0 | 170.0 | 1.0 | 6.95 | SU | ||
and | 171.0 | 172.0 | 1.0 | 16.3 | 24.2 | SU | |
and | 174.0 | 175.0 | 1.0 | 8.62 | SU | ||
and | 177.0 | 185.0 | 8.0 | 29.0 | 21.1 | SU | |
incl | 178.0 | 179.0 | 1.0 | 60.6 | 46.7 | SU | |
and | 179.0 | 180.0 | 1.0 | 39.4 | 25.7 | SU | |
and | 183.0 | 184.0 | 1.0 | 27.4 | 19.7 | SU | |
and | 184.0 | 185.0 | 1.0 | 58.3 | 31.7 | SU | |
and | 205.0 | 206.0 | 1.0 | 50.5 | 62.7 | SU | |
and | 219.0 | 220.0 | 1.0 | 5.42 | 150 | SU | |
loss 0.15m | 245.0 | 271.0 | 26.0 | 1.68 | SU | ||
loss 0.15m | and | 251.0 | 268.0 | 17.0 | 2.17 | SU | |
incl | 253.0 | 255.0 | 2.0 | 8.41 | 25.3 | SU | |
SDH198 | 125.0 | 201.6 | 3.70 | ALS_TSV | |||
0.0 | 125.0 | 125.0 | unsampled | ||||
loss 4.3m | 137.0 | 198.0 | 61.0 | 4.58 | SU | ||
incl | 140.0 | 150.0 | 10.0 | 9.02 | SU | ||
incl | 144.0 | 150.0 | 6.0 | 14.1 | 35.9 | SU | |
incl | 145.0 | 146.0 | 1.0 | 15.7 | 16.3 | SU | |
and | 149.0 | 150.0 | 1.0 | 48.7 | 148 | SU | |
loss 1.25m | and | 161.0 | 167.0 | 6.0 | 14.8 | 14.3 | SU |
incl | 163.0 | 164.0 | 1.0 | 82.6 | 51.8 | SU | |
loss 1.35m | and | 173.0 | 188.0 | 15.0 | 5.27 | 19.0 | SU |
incl | 178.0 | 179.0 | 1.0 | 54.7 | 47.3 | SU | |
Hole | From (m) | To (m) | Intercept (m) | Au Grade (g/t) | Ag Grade (g/t) | Oxidation | |
SDH199 | 0.0 | 221.7 | 1.19 | ALS_TSV | |||
98.0 | 100.0 | 2.0 | 34.0 | SU | |||
incl | 98.0 | 99.0 | 1.0 | 65.1 | SU | ||
148.0 | 165.0 | 17.0 | 2.25 | 10.6 | SU | ||
incl | 160.0 | 165.0 | 5.0 | 5.69 | 11.5 | SU | |
incl | 162.0 | 163.0 | 1.0 | 18.3 | 23.5 | SU | |
169.0 | 177.0 | 8.0 | 0.84 | SU | |||
loss 2.6m | 180.0 | 221.0 | 41.0 | 2.60 | SU | ||
incl | 196.0 | 200.0 | 4.0 | 1.26 | SU | ||
and | 204.0 | 221.0 | 17.0 | 5.19 | 18.0 | SU | |
incl | 213.0 | 214.0 | 1.0 | 18.80 | 23.7 | SU | |
and | 218.0 | 219.0 | 1.0 | 41.70 | 71.2 | SU | |
SDH200 | 0.0 | 207.2 | 1.66 | ALS_TSV | |||
104.0 | 128.0 | 24.0 | 0.91 | SU | |||
133.0 | 174.0 | 41.0 | 6.97 | SU | |||
incl | 133.0 | 144.0 | 11.0 | 22.3 | 17.7 | SU | |
incl | 138.0 | 143.0 | 5.0 | 45.1 | 28.9 | SU | |
incl | 138.0 | 139.0 | 1.0 | 156 | 103 | SU | |
and | 139.0 | 140.0 | 1.0 | 13.8 | 10.4 | SU | |
and | 142.0 | 143.0 | 1.0 | 41.7 | 17.9 | SU | |
and | 146.0 | 158.0 | 12.0 | 2.28 | SU | ||
incl | 155.0 | 156.0 | 1.0 | 7.44 | SU | ||
SDH201 | 0.0 | 211.2 | 0.93 | ALS_TSV | |||
16.0 | 33.0 | 17.0 | 0.81 | OX, TR, SU | |||
incl | 16.0 | 22.0 | 6.0 | 1.24 | SU | ||
55.0 | 76.0 | 21.0 | 0.99 | SU | |||
incl | 68.0 | 71.0 | 3.0 | 1.85 | SU | ||
loss = 0.7m | 129.0 | 190.0 | 61.0 | 1.79 | SU | ||
incl | 129.0 | 139.0 | 10.0 | 5.25 | SU | ||
incl | 130.0 | 132.0 | 2.0 | 18.2 | 41.7 | SU | |
and | 142.0 | 146.0 | 4.0 | 2.11 | SU | ||
and | 158.0 | 167.0 | 9.0 | 1.26 | SU | ||
and | 178.0 | 183.0 | 5.0 | 2.25 | 13.3 | SU | |
193.0 | 211.2 | 18.2 | 1.72 | SU | |||
incl | 194.0 | 211.2 | 17.2 | 1.83 | SU | ||
incl | 195.0 | 200.0 | 5.0 | 2.35 | 36.1 | SU |
Hole | From (m) | To (m) | Intercept (m) | Au Grade (g/t) | Ag Grade (g/t) | Oxidation | |
SDH202 | 0.0 | 200.5 | 0.77 | ALS_TSV | |||
loss 0.7m | 11.0 | 24.0 | 13.0 | 0.89 | SU | ||
51.0 | 54.0 | 3.0 | 4.36 | SU | |||
incl | 51.0 | 52.0 | 1.0 | 8.32 | SU | ||
59.0 | 63.0 | 4.0 | 5.90 | SU | |||
incl | 59.0 | 61.0 | 2.0 | 10.5 | SU | ||
incl | 59.0 | 60.0 | 1.0 | 14.2 | SU | ||
loss 0.1m | 115.0 | 153.0 | 38.0 | 11.8 | SU | ||
loss 0.1m | incl | 121.0 | 138.0 | 17.0 | 25.2 | SU | |
loss 0.1m | incl | 125.0 | 132.0 | 7.0 | 58.7 | 42.7 | SU |
incl | 125.0 | 126.0 | 1.0 | 388 | 243 | SU | |
and | 145.0 | 150.0 | 5.0 | 1.16 | SU | ||
157.0 | 167.0 | 10.0 | 0.60 | SU | |||
181.0 | 194.0 | 13.0 | 0.82 | SU | |||
SDH203 | 0.0 | 238.9 | 1.03 | ALS_TSV | |||
loss 0.9m | 105.0 | 113.0 | 8.0 | 1.07 | SU | ||
loss 1.1m | 125.0 | 177.0 | 52.0 | 3.27 | SU | ||
loss 0.6m | incl | 131.0 | 145.0 | 14.0 | 9.20 | SU | |
loss 0.6m | incl | 131.0 | 135.0 | 4.0 | 14.2 | SU | |
loss 0.2m | incl | 131.0 | 133.0 | 2.0 | 24.8 | 16.9 | SU |
and | 137.0 | 139.0 | 2.0 | 14.2 | 32.5 | SU | |
incl | 137.0 | 138.0 | 1.0 | 24.4 | 53.6 | SU | |
and | 141.0 | 144.0 | 3.0 | 11.8 | SU | ||
incl | 143.0 | 144.0 | 1.0 | 25.5 | 38.1 | SU | |
loss 0.4m | and | 155.0 | 165.0 | 10.0 | 1.29 | SU | |
and | 170.0 | 177.0 | 7.0 | 1.74 | SU | ||
183.0 | 189.0 | 6.0 | 0.86 | SU | |||
loss 0.2m | 211.0 | 229.0 | 18.0 | 1.75 | SU | ||
loss 0.2m | incl | 220.0 | 228.0 | 8.0 | 3.06 | 14.2 | SU |
incl | 224.0 | 225.0 | 1.0 | 7.93 | 15.6 | SU | |
SDH204 | 89.0 | 148.8 | 1.05 | ALS_TSV | |||
98.0 | 102.0 | 4.0 | 2.86 | SU | |||
106.0 | 130.0 | 24.0 | 1.66 | TR, SU | |||
incl | 106.0 | 109.0 | 3.0 | 1.74 | TR | ||
and | 113.0 | 130.0 | 17.0 | 1.92 | 8.7 | SU |
Hole | From (m) | To (m) | Intercept (m) | Au Grade (g/t) | Ag Grade (g/t) | Oxidation | |
SDH205 | 102.0 | 154.0 | 1.84 | ALS_TSV | |||
loss 2.5m | 118.0 | 154.0 | 36.0 | 2.57 | SU | ||
loss 1.3m | incl | 119.0 | 139.0 | 20.0 | 3.40 | SU | |
loss 0.1m | incl | 119.0 | 120.0 | 1.0 | 5.81 | 11.2 | SU |
loss 0.1m | and | 122.0 | 127.0 | 5.0 | 4.03 | 10.4 | SU |
incl | 124.0 | 125.0 | 1.0 | 9.60 | SU | ||
loss 1.0m | and | 133.0 | 138.0 | 5.0 | 4.46 | SU | |
loss 1.0m | and | 142.0 | 152.0 | 10.0 | 2.08 | SU | |
SDH206 | 200.0 | 240.3 | 0.56 | ALS_TSV | |||
0.0 | 200.0 | 200.0 | unsampled | ||||
200.0 | 220.0 | 20.0 | 0.78 | SU | |||
incl | 200.0 | 205.0 | 5.0 | 1.21 | 17.5 | SU | |
SDH208 | 30.0 | 213.8 | 0.87 | ALS_TSV | |||
40.0 | 44.0 | 4.0 | 1.43 | SU | |||
60.0 | 71.0 | 11.0 | 2.81 | SU | |||
incl | 69.0 | 70.0 | 1.0 | 12.7 | SU | ||
106.0 | 112.0 | 6.0 | 0.83 | SU | |||
loss 2.1m | 125.0 | 193.0 | 68.0 | 1.42 | SU | ||
incl | 136.0 | 143.0 | 7.0 | 2.62 | SU | ||
incl | 136.0 | 137.0 | 1.0 | 5.84 | SU | ||
loss 0.7m | incl | 155.0 | 172.0 | 17.0 | 2.29 | SU | |
incl | 156.0 | 157.0 | 1.0 | 6.72 | SU | ||
and | 170.0 | 171.0 | 1.0 | 5.24 | SU | ||
loss 0.2m | and | 184.0 | 191.0 | 7.0 | 2.17 | SU | |
SDH210 | 0.0 | 153.3 | 0.59 | EXLAB | |||
loss 1.2m | 56.0 | 67.0 | 11.0 | 2.51 | SU | ||
loss 1.2m | incl | 58.0 | 66.0 | 8.0 | 3.19 | SU | |
loss 0.1m | incl | 60.0 | 64.0 | 4.0 | 4.96 | SU | |
incl | 61.0 | 62.0 | 1.0 | 6.91 | SU | ||
oss 0.1m | and | 63.0 | 64.0 | 1.0 | 6.37 | SU | |
loss 3.75m | 110.0 | 150.0 | 40.0 | 1.15 | SU | ||
incl | 112.0 | 114.0 | 2.0 | 3.57 | SU | ||
loss 3.45m | and | 123.0 | 141.0 | 18.0 | 1.33 | SU | |
incl | 137.0 | 139.0 | 2.0 | 2.82 | SU | ||
Hole | From (m) | To (m) | Intercept (m) | Au Grade (g/t) | Ag Grade (g/t) | Oxidation | |
SDH211 | 0.0 | 227.2 | 0.98 | ALS_TSV | |||
8.0 | 23.0 | 15.0 | 0.80 | OX | |||
40.0 | 59.0 | 19.0 | 0.89 | OX | |||
132.0 | 145.0 | 13.0 | 1.24 | SU | |||
loss 14.7m | 151.0 | 204.0 | 53.0 | 2.66 | SU | ||
loss 11.3m | incl | 153.0 | 175.0 | 22.0 | 3.83 | SU | |
incl | 153.0 | 154.0 | 1.0 | 53.7 | 21.7 | SU | |
loss 3.1 | and | 180.0 | 193.0 | 13.0 | 2.97 | SU | |
incl | 190.0 | 193.0 | 3.0 | 5.96 | SU | ||
and | 196.0 | 204.0 | 8.0 | 1.69 | SU |
Table 3Pigibo North, Simberi - RC Hole Collar Details
Deposit | Hole ID | TIG | TIG | RL (m) | Dip / Azi | Total |
North (m) | East (m) | Length (m) | ||||
Pigibo N | RC1879 | 209337.9 | 43945.0 | 164.5 | -65 / 360 | 73.0 |
Pigibo N | RC1880 | 209368.1 | 43967.8 | 165.1 | -65 / 360 | 73.0 |
Pigibo N | RC1881 | 209383.2 | 43981.5 | 166.8 | -65 / 180 | 73.0 |
Pigibo N | RC1882 | 209404.0 | 43993.8 | 170.3 | -65 / 180 | 73.0 |
Pigibo N | RC1883 | 209406.0 | 43992.9 | 170.3 | -65 / 360 | 73.0 |
Pigibo N | RC1884 | 209436.3 | 44030.9 | 164.4 | -65 / 360 | 73.0 |
Pigibo N | RC1885 | 209469.4 | 44042.5 | 160.0 | -65 / 180 | 73.0 |
Pigibo N | RC1886 | 209495.1 | 44074.6 | 162.7 | -65 / 360 | 73.0 |
Pigibo N | RC1887 | 209521.5 | 44089.1 | 158.3 | -65 / 360 | 73.0 |
Pigibo N | RC1888 | 209519.1 | 44090.3 | 158.2 | -65 / 180 | 73.0 |
Pigibo N | RC1889 | 209494.6 | 44073.4 | 162.7 | -65 / 180 | 73.0 |
Pigibo N | RC1890 | 209468.3 | 44042.6 | 159.9 | -65 / 360 | 73.0 |
Pigibo N | RC1891 | 209436.0 | 44030.1 | 164.3 | -65 / 180 | 73.0 |
Pigibo N | RC1892 | 209564.4 | 44063.7 | 143.3 | -60 / 270 | 21.0 |
Pigibo N | RC1893 | 209546.0 | 43999.7 | 151.0 | -60 / 270 | 31.0 |
Pigibo N | RC1894 | 209622.7 | 43968.0 | 154.2 | -60 / 270 | 16.0 |
Pigibo N | RC1895 | 209591.5 | 43901.0 | 173.4 | -60 / 270 | 37.0 |
Pigibo N | RC1896 | 209040.7 | 43350.6 | 227.3 | -60 / 180 | 60.0 |
Pigibo N | RC1897 | 209153.0 | 43358.8 | 211.9 | -60 / 180 | 80.0 |
Pigibo N | RC1898 | 209546.6 | 43906.4 | 195.8 | -70 / 90 | 60.0 |
Pigibo N | RC1899 | 209503.8 | 43874.2 | 210.4 | -70 / 360 | 55.0 |
Pigibo N | RC1900 | 209476.1 | 43842.2 | 203.4 | -70 / 180 | 29.0 |
Deposit | Hole ID | TIG | TIG | RL (m) | Dip / Azi | Total |
North (m) | East (m) | Length (m) | ||||
Pigibo N | RC1901 | 209498.6 | 43907.7 | 205.4 | -70 / 180 | 66.0 |
Pigibo N | RC1902 | 209451.7 | 43818.7 | 201.9 | -70 / 360 | 31.0 |
Pigibo N | RC1903 | 209452.3 | 43779.9 | 205.5 | -70 / 180 | 30.0 |
Pigibo N | RC1904 | 209439.8 | 43738.6 | 214.2 | -70 / 360 | 31.0 |
Pigibo N | RC1905 | 209433.0 | 43701.9 | 220.4 | -70 / 180 | 31.0 |
Pigibo N | RC1906 | 209453.5 | 43654.9 | 214.9 | -70 / 360 | 100.0 |
Pigibo N | RC1907 | 209470.2 | 43626.3 | 218.3 | -70 / 180 | 31.0 |
Pigibo N | RC1908 | 209494.8 | 43600.4 | 224.4 | -70 / 360 | 31.0 |
Pigibo N | RC1909 | 209477.3 | 43550.4 | 216.9 | -65 / 190 | 31.0 |
Pigibo N | RC1910 | 209443.5 | 43543.4 | 212.9 | -65 / 277 | 31.0 |
Pigibo N | RC1911 | 209393.9 | 43541.2 | 217.0 | -65 / 085 | 34.0 |
Pigibo N | RC1912 | 209409.8 | 43503.4 | 223.2 | -65 / 175 | 97.0 |
Pigibo N | RC1913 | 209420.5 | 43448.0 | 230.8 | -65 / 360 | 31.0 |
Pigibo N | RC1914 | 209407.6 | 43389.2 | 232.9 | -65 / 180 | 36.0 |
Pigibo N | RC1915 | 209407.5 | 43323.1 | 221.9 | -65 / 360 | 36.0 |
Pigibo N | RC1916 | 209416.7 | 43270.3 | 219.5 | -65 / 180 | 31.0 |
Pigibo N | RC1917 | 209404.6 | 43201.7 | 228.6 | -70 / 360 | 30.0 |
Pigibo N | RC1918 | 209379.5 | 43147.1 | 231.3 | -70 / 180 | 100.0 |
Pigibo N | RC1919 | 209353.8 | 43103.4 | 234.7 | -70 / 360 | 30.0 |
Pigibo N | RC1920 | 209330.3 | 43070.5 | 233.5 | -70 / 180 | 30.0 |
Pigibo N | RC1921 | 209325.3 | 43019.5 | 235.3 | -70 / 360 | 30.0 |
Pigibo N | RC1922 | 209549.0 | 43613.0 | 196.0 | -71 / 085 | 31.0 |
Table 4Pigibo North, Simberi - Down hole intercepts, 0.5 g/t assay cut-off in Exploration RC holes (intercept definition method described following Table 8)
Hole | From (m) | To (m) | Intercept (m) | Au Grade (g/t) | Oxidation |
RC1880 | 0.0 | 73.0 | 0.78 | ALS_TSV | |
0.0 | 44.0 | 44.0 | 1.11 | OX, TR, SU | |
RC1881 | 0.0 | 73.0 | 0.42 | ALS_TSV | |
0.0 | 13.0 | 13.0 | 1.35 | OX | |
RC1882 | 0.0 | 73.0 | 0.18 | ALS_TSV | |
31.0 | 37.0 | 6.0 | 1.25 | SU | |
RC1884 | 0.0 | 73.0 | 0.32 | EXLAB | |
0.0 | 11.0 | 11.0 | 1.13 | OX | |
RC1885 | 0.0 | 73.0 | 0.20 | EXLAB | |
34.0 | 46.0 | 12.0 | 0.86 | TR, SU | |
RC1890 | 0.0 | 73.0 | 0.33 | ALS_TSV | |
12.0 | 26.0 | 14.0 | 0.99 | OX, TR, SU | |
RC1891 | 0.0 | 73.0 | 0.37 | ALS_TSV | |
0.0 | 19.0 | 19.0 | 1.19 | OX, SU | |
RC1894 | 0.0 | 16.0 | 1.11 | ALS_TSV | |
0.0 | 15.0 | 15.0 | 1.15 | OX, TR, SU | |
incl | 9.0 | 13.0 | 4.0 | 2.29 | SU |
12.0 | 13.0 | 1.0 | 5.71 | SU | |
RC1895 | 0.0 | 37.0 | 13.20 | ALS_TSV | |
8.0 | 35.0 | 27.0 | 17.5 | OX, TR, SU | |
incl | 13.0 | 27.0 | 14.0 | 33.2 | OX, SU |
incl | 18.0 | 20.0 | 2.0 | 4.68 | OX |
incl | 22.0 | 27.0 | 5.0 | 89.4 | OX, SU |
incl | 23.0 | 26.0 | 3.0 | 146 | OX, SU |
incl | 24.0 | 25.0 | 1.0 | 410 | SU |
RC1901 | 0.0 | 66.0 | 1.48 | ALS_TSV | |
0.0 | 25.0 | 25.0 | 2.71 | OX | |
incl | 1.0 | 6.0 | 5.0 | 7.26 | OX |
incl | 19.0 | 25.0 | 6.0 | 2.77 | OX |
31.0 | 36.0 | 5.0 | 1.24 | OX | |
39.0 | 60.0 | 21.0 | 1.01 | OX, SU |
No significant intercepts were found in holes RC1879, RC1883, RC1886 to RC1889, RC1892, RC1893, RC1896 to RC1900 and RC1902 to RC1921.
Table 5Other Prospects, Simberi - Core and RC Hole Collar Details
Deposit | Hole ID | TIG | TIG | RL (m) | Dip / Azi | Total | Core |
North (m) | East (m) | Length (m) | Loss (m) | ||||
Samat | RC1876 | 207620.0 | 44354.2 | 144.1 | -60 / 45 | 99.0 | |
Samat | RC1877 | 207706.7 | 44425.0 | 153.7 | -60 / 45 | 105.0 | |
Samat | RC1878 | 207796.4 | 44372.6 | 157.2 | -60 / 45 | 120.0 | |
Sorowar | SDH209 | 210460.2 | 44426.4 | 210.7 | -71 / 45 | 213.8 | 41.00 |
Sorowar | SDH212 | 210418.5 | 44452.3 | 210.6 | -60 / 46 | 202.4 | 6.10 |
Table 6Other Prospects, Simberi - Down hole intercepts, 0.5 g/t assay cut-off in Exploration RC holes (intercept definition method described below Table 8)
Hole | From (m) | To (m) | Intercept (m) | Au Grade (g/t) | Oxidation | |
RC1876 | 0.0 | 99.0 | 0.14 | EXLAB | ||
No significant intercepts | ||||||
RC1877 | 0.0 | 105.0 | 0.51 | EXLAB | ||
12.0 | 19.0 | 7.0 | 1.96 | SU | ||
incl | 13.0 | 18.0 | 5.0 | 2.42 | SU | |
incl | 17.0 | 18.0 | 1.0 | 5.30 | SU | |
48.0 | 68.0 | 20.0 | 1.22 | SU | ||
incl | 48.0 | 61.0 | 13.0 | 1.41 | SU | |
RC1878 | 0.0 | 120.0 | 0.13 | ALS_TSV | ||
18.0 | 20.0 | 2.0 | 1.57 | SU | ||
SDH209 | 0.0 | 213.8 | 0.22 | ALS_TSV | ||
loss 9.0m | 0.0 | 25.0 | 25.0 | 1.01 | OX | |
loss 0.5m | 94.0 | 104.0 | 10.0 | 0.48 | OX | |
SDH212 | 0.0 | 202.4 | 0.29 | ALS_TSV | ||
12.0 | 18.0 | 6.0 | 0.89 | OX | ||
loss 0.2m | 45.0 | 66.0 | 21.0 | 0.88 | OX | |
Tatau / Tabar Islands, PNG
Results were received for the last 4 core holes drilled at Mt Tiro, Tatau Island earlier in the year. Better mineralised downhole intercepts included:
·; 23m @ 1.19g/t Au from 12m and 13m @ 1.22 from 110m in TTD021
·; 13m @ 1.12g/t Au from 50m in TTD022
·; 11m @ 1.38g/t Au from surface in TTD024
The results will be used to help plan the next phase of exploration on Tatau, while waiting for the renewal of EL609.
Table 7Mt Trio Prospect, Tatau Prospects - Drill Hole Collar Details
Prospect / Island | Hole ID | TIGNorth (m) | TIG East (m) | RL (m) | Dip / Azi | Total Length (m) |
Mt Tiro, Tatau | TTD021 | 37221.0 | 188379.0 | 292.0 | -60 / 60 | 215.4 |
Mt Tiro, Tatau | TTD022 | 37067.3 | 188189.5 | 319.0 | -60 / 187 | 201.0 |
Mt Tiro, Tatau | TTD023 | 37496.7 | 188532.2 | 271.0 | -60 / 250 | 212.0 |
Mt Tiro, Tatau | TTD024 | 37101.0 | 188435.0 | 299.0 | -65 / 332 | 200.0 |
Table 8Mt Tiro Prospect, Tatau - Down hole intercepts, 0.5 g/t assay cut-off in Exploration RC holes (intercept definition method described below)
Hole | From (m) | To (m) | Intercept (m) | Au Grade (g/t) | Oxidation |
TTD021 | 60.0 | 215.4 | 0.48 | EXLAB | |
12.0 | 32.0 | 20.0 | 1.19 | OX | |
36.0 | 42.0 | 6.0 | 1.81 | OX | |
incl | 41.0 | 42.0 | 1.0 | 5.54 | OX |
110.0 | 123.0 | 13.0 | 1.22 | OX | |
incl | 117.0 | 120.0 | 3.0 | 2.45 | TR |
TTD022 | 0.0 | 200.1 | 0.25 | EXLAB | |
50.0 | 63.0 | 13.0 | 1.12 | OX, TR, SU | |
Total core loss =39.3m | |||||
TTD023 | 0.0 | 212.0 | 0.09 | EXLAB | |
No significant intercepts | |||||
TTD024 | 0.0 | 200.0 | 0.21 | EXLAB | |
0.0 | 11.0 | 11.0 | 1.38 | OX | |
incl | 8.0 | 10.0 | 2.0 | 2.79 | OX |
106.0 | 108.0 | 2.0 | 3.76 | SU | |
178.0 | 183.0 | 5.0 | 1.05 | SU | |
NOTES:Sampling, Assaying and Down Hole Intercept Calculation Methods applicable to
Table2,Table 4,Table 6 and Table 8 above.
Broad down hole intercepts are determined using a cut-off of 0.5 g/t Au and a minimum grade*length of 5gmpt. Such intercepts may include material below cut-off but no more than 5 sequential meters of such material and except where the average drops below the cut-off. Selvage is only included where its average grade exceeds 0.5/t. Using the same criteria for included sub-grade, supplementary cut-offs, of 2.5g/t , 5.0g/t and 10g/t, are used to highlight higher grade zones and spikes. Single assays intervals are reported only where >5.0g/t and >=1m down hole. No high grade cut off is applied
All samples were fully prepared at the company's on-site Sample Preparation Facility on Simberi Island. Analyses of the samples, along with approximately 15% inserted QAQC samples including field and pulp duplicates, blanks and commercial standards, were undertaken by either ALS Townsville (tagged ALS_TSV in the header) or Simberi EXLAB (tagged EXLAB), an on-site laboratory dedicated to exploration samples.
The gold assay method is either 50g Fire Assay with a 0.01g/t Au detection limit (ALS_TSV) or Aqua Regia digest of a 25g charge with a 0.02g/t Au detection limit (EXLAB). Samples, with a reported below detection grade, are assigned a grade of half the detection limit. Duplicates, inserted for QC purposes, are not averaged. Where reported, Ag grade is its weighted average over the same interval as that defined by the Au intercept. Ag is determined by ALS_TSV using an Aqua Regia digest of a 0.5g charge followed by ICP OES analysis, with a detection limit of 0.2g/t Ag.
In core holes, intercept grades are calculated using sample grades weighted by sampled length divided by interval length. This results in any included core loss being assigned zero grade. The average grade over the length of the hole sampled is shown as a ranking guide and is calculated without any cut-off applied.
All intercepts are calculated over down hole lengths and more information is required to determine the true width.
Gold Ridge, Solomon Islands
Exploration core drilling commenced in April. Drilling is initially targeted the Charivunga Mineralised Zone, where previous operators produced significant down hole intercepts in core holes. Seven holes / 2,502 m were drilled in the June and September quarters, completing the Phase I programme. Assay results from the first 4 holes, GDC001 to GDC004, were released in August 31, 2011 (ALD Media Release: Exploration Update - Gold Ridge, Solomon Islands). Assay results were subsequently received for GDC005 and downhole intercepts found in all 5 holes are tabled below.
To date at Charivunga, gold mineralisation is identified over a strike length of 450m in a NE-trending corridor up to 250m wide. Gold mineralisation, intermittently present from surface, is most consistent and of better grade from approximately 200m to 300m below surface. Low grade mineralisation occurs with fine disseminated pyrite and marcasite in argillic alteration zones. Higher grades are mainly restricted to occasional steep dipping, thin pyritic and polymetallic quartz-carbonate veins.
Limited access required that the holes be drilled at different azimuths from two selected sites, intersecting the zone of mineralisation at different angles. Additional structural information is being acquired from the oriented core to allow the true width of each down-hole intercepts to be determined.
The Charivunga Mineralised Zone is presently open along strike in both NE and SW directions. Mineral resources are yet to be estimated from the results of drilling done in the zone.
Exploration drilling is now focussed on testing for down dip extensions of the Namachamata deposit and a nearby IP chargeability anomaly, with 2 holes GDC008, GDC009 completed and GDC010 in progress (commenced 29th September).
Table 9Gold Ridge Exploration - Drill Hole Collar Details
Prospect | Hole ID | GR_MineNorth (m) | GR_mine East (m) | RL (m) | Dip / Azi | Total Length (m) |
Charivunga | GDC001 | 40327.7 | 23673.8 | 422.1 | -60 / 173 | 317.5 |
Charivunga | GDC002 | 40456.7 | 23599.7 | 437.3 | -60 / 116 | 350.5 |
Charivunga | GDC003 | 40450 | 23600 | 436.5 | -60 / 149 | 350.0 |
Charivunga | GDC004 | 40450 | 23600 | 436.5 | -65 / 180 | 368.8 |
Charivunga | GDC005 | 40459.9 | 23600.9 | 437.2 | -60.5 / 93.5 | 377.9 |
Charivunga | GDC006 | 40450 | 23600 | 436.5 | -65 / 180 | 368.9 |
Charivunga | GDC007 | 40320 | 23675 | 421.8 | -65 / 180 | 368.9 |
Namachamata | GDC008 | 40800 | 23425 | 484 | -65 / 180 | 338.7 |
Namachamata | GDC009 | 40600 | 23450 | 486.2 | -65 / 090 | 350 |
Namachamata | GDC010 | 40700 | 23725 | 407.7 | -65 / 270 | in progress |
Table 10 Gold Ridge Exploration - Down hole intercepts, 0.5 g/t assay cut-off in Exploration RC holes (intercept definition method described below)
Hole | From (m) | To (m) | Intercept (m) | Au Grade (g/t) | Oxidation |
GDC001 | 0 | 317.5 | 0.49 | GEN_TSV | |
19 | 42 | 23 | 1.43 | SU | |
incl | 20 | 25 | 5 | 1.86 | SU |
and | 32 | 34 | 2 | 4.48 | SU |
incl | 33 | 34 | 1 | 8.84 | SU |
and | 38 | 42 | 4 | 2.96 | SU |
incl | 38 | 39 | 1 | 8.86 | SU |
78 | 100 | 22 | 1.17 | SU | |
incl | 81 | 88 | 7 | 1.97 | SU |
125 | 145 | 20 | 0.98 | SU | |
incl | 127 | 133 | 6 | 1.83 | SU |
196 | 222 | 26 | 1.36 | SU | |
incl | 201 | 207 | 6 | 3.21 | SU |
incl | 201 | 202 | 1 | 9.34 | SU |
and | 218 | 222 | 4 | 1.33 | SU |
GDC002 | 0 | 350.5 | 1.18 | GEN_TSV | |
48 | 55 | 7 | 0.96 | SU | |
60 | 68 | 8 | 1.07 | SU | |
92 | 102 | 10 | 0.6 | SU | |
114 | 115 | 1 | 96.3 | SU | |
130 | 159 | 29 | 2.5 | SU | |
incl | 130 | 133 | 3 | 10.1 | SU |
incl | 132 | 133 | 1 | 27.3 | SU |
and | 137 | 142 | 5 | 1.98 | SU |
and | 153 | 159 | 6 | 3.45 | SU |
incl | 155 | 156 | 1 | 9.61 | SU |
161 | 170 | 9 | 0.64 | SU | |
187 | 195 | 8 | 1.48 | SU | |
incl | 188 | 195 | 7 | 1.62 | SU |
Hole | From (m) | To (m) | Intercept (m) | Au Grade (g/t) | Oxidation |
208 | 216 | 8 | 0.73 | SU | |
239 | 350.5 | 111.5 | 1.38 | SU | |
incl | 240 | 242 | 2 | 3.24 | SU |
and | 256 | 258 | 2 | 3.45 | SU |
and | 273 | 282 | 9 | 2.02 | SU |
and | 287 | 295 | 8 | 2.29 | SU |
and | 319 | 323 | 4 | 3.18 | SU |
incl | 342 | 350.5 | 8.5 | 2.12 | SU |
incl | 346 | 347 | 1 | 5.44 | SU |
GDC003 | 0 | 350 | 1.18 | GEN_TSV | |
42 | 51 | 9 | 1.11 | SU | |
incl | 43 | 51 | 8 | 1.15 | SU |
59 | 63 | 4 | 1.31 | SU | |
125 | 177 | 52 | 2.31 | SU | |
incl | 143 | 152 | 9 | 6.42 | SU |
incl | 143 | 149 | 6 | 8.69 | SU |
incl | 143 | 144 | 1 | 17 | SU |
and | 146 | 147 | 1 | 17.6 | SU |
and | 155 | 158 | 3 | 5.4 | SU |
186 | 195 | 9 | 1.27 | SU | |
incl | 186 | 191 | 5 | 1.7 | SU |
218 | 349 | 131 | 1.73 | SU | |
incl | 218 | 222 | 4 | 1.78 | SU |
and | 224 | 231 | 7 | 2.25 | SU |
and | 234 | 238 | 4 | 2.91 | SU |
and | 255 | 262 | 7 | 1.71 | SU |
and | 268 | 277 | 9 | 3.84 | SU |
incl | 270 | 272 | 2 | 8.83 | SU |
incl | 271 | 272 | 1 | 18.7 | SU |
and | 279 | 286 | 7 | 2.54 | SU |
and | 288 | 291 | 3 | 3.9 | SU |
incl | 290 | 291 | 1 | 9.7 | SU |
and | 293 | 300 | 7 | 2 | SU |
and | 302 | 326 | 24 | 2.23 | SU |
incl | 310 | 311 | 1 | 6.34 | SU |
and | 330 | 340 | 10 | 1.6 | SU |
GDC004 | 0 | 368.8 | 1.36 | GEN_TSV | |
45 | 53 | 8 | 1.15 | SU | |
Incl | 46 | 53 | 7 | 1.23 | SU |
108 | 157 | 49 | 0.98 | SU | |
Incl | 110 | 112 | 2 | 3.13 | SU |
And | 114 | 121 | 7 | 1.54 | SU |
Incl | 115 | 120 | 5 | 1.81 | SU |
And | 134 | 138 | 4 | 1.46 | SU |
And | 147 | 157 | 10 | 1.25 | SU |
Incl | 151 | 157 | 6 | 1.63 | SU |
Hole | From (m) | To (m) | Intercept (m) | Au Grade (g/t) | Oxidation |
180 | 225 | 45 | 1.52 | SU | |
Incl | 185 | 191 | 6 | 1.45 | SU |
And | 194 | 199 | 5 | 2.65 | SU |
And | 213 | 218 | 5 | 4.48 | SU |
Incl | 214 | 215 | 1 | 13 | SU |
Incl | 221 | 225 | 4 | 1.63 | SU |
243 | 313 | 70 | 3.23 | SU | |
Incl | 244 | 252 | 8 | 1.76 | SU |
And | 256 | 272 | 16 | 4.55 | SU |
Incl | 262 | 267 | 5 | 6.97 | SU |
Incl | 264 | 265 | 1 | 20.5 | SU |
Incl | 266 | 267 | 1 | 5.77 | SU |
and | 270 | 271 | 1 | 20 | SU |
and | 276 | 293 | 17 | 3.78 | SU |
incl | 280 | 281 | 1 | 5.73 | SU |
incl | 289 | 290 | 1 | 5.47 | SU |
incl | 291 | 292 | 1 | 17.3 | SU |
and | 297 | 313 | 16 | 4.33 | SU |
incl | 307 | 308 | 1 | 32.2 | SU |
321 | 349 | 28 | 2.69 | SU | |
incl | 321 | 347 | 26 | 2.85 | SU |
incl | 321 | 327 | 6 | 5.76 | SU |
and | 341 | 346 | 5 | 3.66 | SU |
353 | 368 | 15 | 2.16 | SU | |
incl | 355 | 364 | 9 | 2.84 | SU |
incl | 360 | 361 | 1 | 9.45 | SU |
GDC005 | 0.0 | 378.0 | 0.99 | GEN_TSV | |
0.0 | 5.0 | 5.0 | 1.38 | OX | |
41.0 | 46.0 | 5.0 | 1.18 | TR | |
52.0 | 68.0 | 16.0 | 0.98 | TR | |
95.0 | 99.0 | 4.0 | 6.69 | TR | |
incl | 96.0 | 99.0 | 3.0 | 8.68 | TR |
incl | 98.0 | 99.0 | 1.0 | 24.3 | TR |
156.0 | 173.0 | 17.0 | 1.06 | TR | |
incl | 156.0 | 157.0 | 1.0 | 5.75 | TR |
188.0 | 214.0 | 26.0 | 1.02 | TR, SU | |
incl | 204.0 | 205.0 | 1.0 | 7.00 | TR |
230.0 | 233.0 | 3.0 | 2.07 | TR | |
281.0 | 302.0 | 21.0 | 1.79 | OX, TR, SU | |
incl | 285.0 | 287.0 | 2.0 | 5.96 | OX |
292.0 | 302.0 | 10.0 | 1.88 | TR, SU | |
incl | 295.0 | 297.0 | 2.0 | 3.98 | TR |
328.0 | 335.0 | 7.0 | 1.02 | SU | |
339.0 | 378.0 | 39.0 | 3.96 | SU | |
incl | 351.0 | 353.0 | 2.0 | 2.77 | SU |
and | 361.0 | 363.0 | 2.0 | 4.12 | SU |
incl | 377.0 | 378.0 | 1.0 | 109 | SU |
Table10 above. NOTE: Broad down hole intercepts are determined using a cut-off of 0.5 g/t Au and a minimum grade*length of 5gmpt. Such intercepts may include material below cut-off but no more than 5 sequential meters of such material and except where the average drops below the cut-off. Selvage is only included where its average grade exceeds 0.5/t. Using the same criteria for included sub-grade, supplementary cut-offs, of 2.5g/t , 5.0g/t and 10g/t, are used to highlight higher grade zones and spikes. Single assays intervals are reported only where >5.0g/t and >=1m down hole. No high grade cut off is applied.
After logging and cutting on-site, the samples were bagged and shipped by company vehicle to Intertek SI's Sample Preparation Facility in Honiara, where all samples were dried crushed and pulverised. Analyses of the samples, along with approximately 12.5% inserted QAQC samples including field duplicates, blanks and commercial standards, were undertaken by Genalysis Townsville (tagged GEN_TSV in the header).
The gold assay method is Fire Assay, using a 50g-charge with a 0.005g/t Au detection limit (Genalysis_TSV). Samples, with a reported below detection grade, are assigned a grade of half the detection limit. Duplicates, inserted for QC purposes, are not averaged. Where reported, Ag grade is its weighted average over the same interval as that defined by the Au intercept. Ag is determined by Genalysis_TSV using an Aqua Regia digest of a 0.5g charge followed by ICP OES analysis, with a detection limit of 0.2g/t Ag.
In core holes, intercept grades are calculated using sample grades weighted by sampled length divided by interval length. This results in any included core loss being assigned zero grade. The average grade over the length of hole sampled is shown as a ranking guide and is calculated without any assay cut-off applied. The reported intercepts are all downhole lengths and additional information would be required to estimate the true width.
Avu Avu, Solomon Islands
The Solomon Islands Ministry of Mines, Energy and Rural Electrification, issued a Letter of Intent (LoI) for its 122 km2 Avuavu Special Prospecting Licence (SPL) application on the central southern coast of Guadalcanal. The LoI grants Australian Solomon Gold (SI) Ltd a minimum 6 months to negotiate a Surface Access Agreement with local landowners, a prerequisite to the granting of full exploration rights. The Avuavu application is based on a review of historical exploration records that report anomalous copper values in surface samples. Once access is granted, Allied plans to undertake grass roots surface exploration to confirm and subsequently delimit areas of copper anomalism. | |||||
RESULTS OF OPERATIONS
Cash position as at September 30, 2011
Allied Gold's cash position as at September 30, 2011 was $48.5 million in available cash and cash equivalents compared with $83.1 million as at June 30, 2011 and $39.2 million as at December 31, 2010.
Operating cash flow for the quarter (not including 4,341 ounces of gold at refinery on September 30, 2011) was positive $8.4 million
The reduction in cash is due primarily to expenditure on plant and equipment to support the ramping up to full production at Gold Ridge and the plant expansion at Simberi (including settlement in the September quarter of capital creditors at June 30, 2011 that resulted in a net reduction in creditors during the quarter).
Quarter ended September 30, 2011 as compared to Quarter ended September 30, 2010
The tables below summarises the key financial and operating statistics for Allied Gold's mining and processing activities for the quarter and the previous quarter:
3 months ended September 30 | |||
Key financial statistic | 2011 | 2010* | |
$000 | $000 | ||
Sales revenue | 54,731 | 21,633 | |
Gross margin | 10,571 | 4,182 | |
Corporate expenses | (2,330) | (2,687) | |
(Loss) / Gain on (disposal) / acquisition of subsidiary | (17) | - | |
Foreign exchange gain / (loss) | (2,403) | (523) | |
Other income | 393 | 560 | |
Financial expenses | (2,374) | (379) | |
Profit for the period | 3,840 | 1,153 | |
*Restated as a result of adoption of functional currency effective July 1, 2011.
Note: The current quarter includes sales revenue and gross margin for the Group's Simberi and Gold Ridge operations, whereas the September 30, 2010 quarter included results from Simberi's operations only.
Key financial statistics | |||
Cashflow from operations | 8,421 | 5,828 | |
Cashflow from investing activities | (36,066) | (59,688) | |
Cashflow from financing activities | (4,250) | 39,923 | |
Net cash outflows | (31,895) | (13,937) |
3 months ended September | |||
Key operating statistic | Unit of measure | 2011 | 2010 |
Simberi
| |||
Waste mined.......................................................................... | tonnes | 318,172 | 535,193 |
Ore mined............................................................................... | tonnes | 569,049 | 594,497 |
Ore processed........................................................................ | tonnes | 528,702 | 570,473 |
Grade..................................................................................... | grams of gold/tonne | 1.07 | 1.09 |
Recovery................................................................................ | % | 87.20 | 91.30 |
Gold produced......................................................................... | ounces | 15,899 | 18,206 |
Gold sold................................................................................ | ounces | 15,337 | 16,935 |
Gold Ridge
Waste mined.......................................................................... | tonnes | 801,430 | - |
Ore mined............................................................................... | tonnes | 566,829 | - |
Ore processed........................................................................ | tonnes | 459,990 | - |
Grade..................................................................................... | grams of gold/tonne | 1.98 | - |
Recovery................................................................................ | % | 69.69 | - |
Gold produced......................................................................... | ounces | 20,186 | - |
Gold sold................................................................................ | ounces | 15,698 | - |
Results for the Quarter compared to the Previous Quarter
Allied Gold reported revenue of $54.7 million and a net profit of $3.8 million or 1.92 cents per share for the quarter ended September 30, 2011 (the "Quarter"), compared with revenue of $21.6 million and a net profit of $1.2 million or 0.67 cents per share for the prior corresponding quarter ended September 30, 2010 (the "Previous Quarter").
The results for the Quarter as compared to the Previous Quarter reflect the following:
·; Gold revenue for the Quarter of $54.7 million was 153% higher than gold revenue of $21.6 million in the Previous Quarter for the following reasons:
o For financial reporting purposes, the Gold Ridge project entered the production phase on July 1, 2011 and commenced recognising revenue in the statement of comprehensive income. The Gold Ridge project contributed approximately 50% of the revenue in the September 2011 quarter and nil in the June 2011 quarter and the September 2010 quarter.
o Whilst Simberi's ounces sold during the Quarter were lower at 15,337ozs compared to 16,935ozs in the Previous Quarter, the gold price realised per ounce was higher at $1,751 per ounce compared to $1,224 per ounce (a favourable variance of $527 per ounce or $8.1 million in revenue).
o The average realised gold price in the Previous Quarter is net of adjustments against revenue of $3.2 million arising from the Group's hedge book. Whilst the hedge book was paid out in February 2010, for accounting purposes the hedging losses crystallised at that time were amortised in accordance with the original maturity schedule of the hedge book. The final maturity of the hedge book at the time of its closure in February 2010 was December 31, 2010 and as such there were no further hedge accounting adjustments required for the September 2011 quarter.
·; Cost of sales of $44.2 million for the quarter equates to $1,423 per ounce of gold sold compared to the Previous Quarter costs of sales of $17.5 million or $1,030 per ounce (variance of $392 per ounce or $12.2 million). Costs per ounce were higher during the quarter due to:
o Cost of goods sold per ounce at Simberi increased from $1,030 in the Previous Quarter to $1,343 per ounce in the Current Quarter. $126 per ounce is attributable to the fixed costs being apportioned over a lower number of ounces sold. The remaining $187 per ounce increase is due to increases in maintenance costs as a consequence of unseasonal rain during the quarter resulting in a deterioration of haul roads, the allocation of corporate service costs and the additional cost of coastal shipping and port charges due to Simberi's own vessel undergoing maintenance during the quarter.
o Gold Ridge was not in production in the Previous Quarter. Cost of goods sold per ounce for the Current Quarter at Gold Ridge were $1,608 per ounce, contributing to the overall increase in average cost of goods sold per ounce.
o The table below provides details of the costs of sales for the two periods by key operating costs elements:
Cost of sales | 3 months to Sept 2011 | 3 months to Sept 2010* | |
$m | $m |
| |
Employee expenses | (6.4) | (2.5) |
|
Stores and other consumables | (8.1) | (3.0) |
|
Fuel, power and water | (10.7) | (2.9) |
|
Maintenance | (5.0) | (1.9) |
|
Other | (11.6) | (4.3) |
|
(41.8) | (14.6) |
| |
Depreciation and amortisation charges | (10.9) | (4.2) |
|
Changes in inventories and work in progress | 9.5 | 1.9 |
|
(43.2) | (16.9) |
| |
Royalties | (1.0) | (0.6) |
|
Total Cost of sales | (44.2) | (17.5) |
|
*Restated as a result of adoption of functional currency effective July 1, 2011.
Note: The current quarter includes costs for the Group's Simberi and Gold Ridge operations, whereas the September 30, 2010 quarter included cost of sales from Simberi's operations only.
·; Corporate expenses decreased in the Quarter, compared to the Previous Quarter despite the Company increasing its corporate office presence to carry out a number of centralised functions (purchasing, human resources, information technology and training) to support its two operations. Corporate expenses incurred of $2.3 million during the Quarter compared to $2.7 million in the Previous Quarter (a variance of $0.4 million) reflect the increase in corporate recharges back to operational business units to reflect the shared service cost incurred.
·; Other income for the Quarter of $0.4 million relates to interest income earned compared to $0.6 million in the Previous Quarter, due to higher cash on hand held during the previous quarter.
·; Financial expenses of $2.4 million in the Quarter compared to $0.5 million in the Previous Quarter relates to the cost of funding, predominately a $35 million debt facility provided by International Finance Corporation Limited and a number of finance lease facilities. Financial expenses were also higher due to an increase in the accrual of discount on environmental provisions due to the restatement of the Gold Ridge provision for rehabilitation at 30 June 2011.
Cash and cash flows for the Quarter compared to the Previous Quarter
In the quarter, Allied Gold reported a net decrease in cash and cash equivalents of $31.9 million compared to a net decrease of $13.9 million in cash and cash equivalents in the Previous Quarter. The increased cash outflow in the Quarter was primarily due to:
·; Cash from operating activities of $8.4 million in the Quarter increased compared to the Previous Quarter cash from operating activities of $5.8 million as a result of:
o Increased receipts from customers due to increased ounces sold, primarily due to the inclusion of Gold Ridge gold sales proceeds for the first time in the September 2011 quarter, and an increased gold price being partially offset by lower Simberi gold sold and higher operating costs.
o Inventory levels were increased at both sites from June 2011, particularly Gold Ridge; this is reflected in payments to suppliers.
o The increased cash cost of production as noted previously.
·; Cash used by investing activities decreased from $60.0 million in the Previous Quarter to $36.1 million in the Quarter due to payments to Gold Ridge suppliers and employees being shown as capital investment cash flows during the commissioning stage of the Gold Ridge Development project (Previous Quarter). During the current quarter, there was further significant investment expenditure in relation to finalising the Gold Ridge redevelopment totalling approximately $28 million, including the settlement in the September 2011 quarter of capital creditors that were outstanding at June 30, 2011, and the ongoing Simberi plant expansion and sulphide feasibility projects of approximately $0.8 million.
·; Cash generated by financing activities decreased from an inflow of $39.9 million in the Previous Quarter to an outflow of $4.3 million during the current quarter. The Previous Quarter includes proceeds from the International Finance Corporation Limited loan facility of $35 million. Financing outflows in the Quarter related to repayments made under lease facilities and an insurance funding loan.
Nine months ended September 30, 2011 as compared to nine months ended September 30, 2010
The tables below summarise the key financial and operating statistics for Allied's mining and processing activities for the nine months ended September 30, 2011 (Nine Months), the nine months ended September 30, 2010 (Previous Nine Months), and the year ended December 31, 2010:
9 months ended September 30 | 12 months ended December 31 | ||
Key financial statistic | 2011 | 2010* | 2010* |
$000 | $000 | $000 | |
Sales revenue | 101,404 | 58,601 | 80,948 |
Gross margin | 18,289 | 6,626 | 11,433 |
Gains / (losses) on derivatives | - | 684 | 684 |
Corporate expenses | (11,508) | (9,961) | (12,592) |
Share based remuneration | (52) | (9) | 1,336 |
Impairment of available for sale assets | - | (8) | (8) |
(Loss) / gain on (disposal) / acquisition of subsidiary |
(189) |
39,387 |
39,387 |
Foreign exchange gain / (loss) | (2,685) | 659 | 1,659 |
Other income | 1,084 | 3,687 | 8,257 |
Financial expenses | (4,087) | (4,846) | (5,004) |
(Loss)/profit for the period | 852 | 36,219 | 33,036 |
*Restated as a result of adoption of functional currency effective July 1, 2011.
Note: The nine months to September 30, 2011 includes sales revenue and gross margin for the Gold Ridge operations for the September 2011 quarter only. Prior to this sales revenue and gross margin for Gold Ridge were capitalised as assets under construction as Gold Ridge was in the development phase.
Key financial statistics | |||
Cashflow from operations | 22,758 | (6,607) | (3,996) |
Cashflow from investing activities | (96,210) | (121,140) | (172,438) |
Cashflow from financing activities | 88,262 | 37,364 | 47,289 |
Net cash inflows/(outflows) | 14,810 | (90,383) | (129,145) |
Key operating statistic |
Unit of measure | 9 months ended September 30, 2011 | 9 months ended September 30, 2010 | 12 months ended December 31, 2010 |
Simberi
Waste mined.......................................................................... |
tonnes |
1,288,303 |
963,062 |
1,491,093 |
Ore mined............................................................................... | tonnes | 1,597,928 | 1,586,239 | 2,241,526 |
Ore processed........................................................................ | tonnes | 1,461,004 | 1,554,108 | 2,137,139 |
Grade..................................................................................... | grams of gold/tonne | 1.09 | 1.16 | 1.16 |
Recovery................................................................................ | % | 87.9 | 89.0 | 88.9 |
Gold produced......................................................................... | ounces | 44,897 | 51,053 | 69,974 |
Gold sold................................................................................ | ounces | 46,376 | 47,526 | 64,147 |
Gold Ridge
Waste mined.......................................................................... |
tonnes | 2,457,347 | - |
- |
Ore mined............................................................................... | tonnes | 1,027,150 | - | - |
Ore processed........................................................................ | tonnes | 931,666 | - | - |
Grade..................................................................................... | grams of gold/tonne | 1.59 | - | - |
Recovery................................................................................ | % | 67.1 | - | - |
Gold produced......................................................................... | ounces | 32,260 | - | - |
Gold sold................................................................................ | ounces | 21,974* | - | - |
*6,276 ounces relates to gold sold during the commissioning phase which was netted against the cost of construction.
Results for the Nine Months compared to the Previous Nine Months
Allied Gold reported revenue of $101.4 million and a net profit of $0.9 million or 0.45 cents per share for the Nine Months, compared with revenue of $58.6 million and a net profit of $36.2 million or 20.91 cents per share for the Previous Nine Months.
The results for the Nine Months as compared to the Previous Nine Months reflect the following:
·; Gold sales of 62,074 ounces in the Nine Months were at an average realized price of $1,626 per ounce compared to gold sales of 47,526 ounces in the Previous Nine Months which were at an average realized price (net of hedging adjustments) of $1,231 per ounce. The current Nine Months revenue was higher due to:
o For financial reporting purposes, the Gold Ridge project entered the production phase on July 1 and commenced recognising revenue in the income statement. The Gold Ridge project contributed approximately $27.9 million in revenue from the sale of 15,698 ounces (average realised price of $1,751 per ounce) in the Nine Months and and nil in the Previous Nine Months.
o Simberi realized an average gold price of $1,574 per ounce on sale of 46,376 ounces during the the current nine months compared to 47,526 ounces during the previous nine months at an average realized price (net of hedging adjustments) of $1,231 per ounce.
o Add back of non-cash adjustments in the Previous Nine Months of $8.8 million. Whilst the hedge book was paid out in February 2010, for accounting purposes the hedging losses crystallised at that time were amortised in accordance with the original maturity schedule of the hedge book. The final maturity of the hedge book at the time of its closure in February 2010 was December 31, 2010 and as such there were no further hedge accounting adjustments required in 2011.
·; Cost of sales of $83.1 million for the Nine Months equates to $1,339 per ounce compared to the Previous Nine Months costs of sales of $52.0 million or $1,094 per ounce (variance of $245 per ounce or $15.2 million). Costs per ounce sold were higher during the Nine Months due to:
o Gold Ridge starting production during the current quarter with a cost of goods sold for the quarter of $1,608 per ounce, which has increased the average cost of goods sold. The higher than forecast LOM average costs in the current period primarily reflect the impact of spreading fixed costs over a lower number of ounces produced.
o Simberi ounces sold are comparable between the two nine month periods however the cost of goods sold has increased from $1,094 per ounce to $1,294 per ounce due to increased fuel and power generation expenditure as a consequence of higher world crude oil prices, increased charge back of corporate shared services expenditure during the current nine months, the adverse impact on USD cash costs of a strengthening of the AUD and the PGK against the USD and higher deprecation and amortisation reflecting the Group's investment in plant, property and equipment including mobile equipment under finance leases.
·; The Company has increased its corporate presence to carry out a number of centralised functions (purchasing, human resources, information technology and training) to support its two operations. Corporate expenses incurred of $11.5 million during the Nine Months compared to $10.0 million in the Previous Nine Months (a negative variance of $1.5 million) were due to expenditure associated with the Schemes of Arrangement and the Company moving to the main board of the London Stock Exchange.
·; The Previous Nine Months' results include $39.4 million as a gain on acquisition in relation to the purchase of Australian Solomons Gold Limited ("ASG"). ASG was the ultimate parent entity of the group that owned the Gold Ridge project prior to purchase by Allied Gold Limited.
·; Other income for the Nine Months of $1.1 million relates predominately to interest income earned compared to $3.9 million in the Previous Nine Months, due to much higher cash on hand held during the Previous Nine Months. Previous Nine Months income also includes a gain on disposal of investment of $1.1 million.
Cash and cash flows for the Nine Months compared to the Previous Nine Months
In the Nine Months, Allied Gold reported a net increase in cash and cash equivalents of $14.8 million compared to a net decrease in cash and cash equivalents of $90.4 million in the previous Nine Months. The cash movements during this period were primarily due to:
·; Cash generated from operating activities of $22.8 million in the Nine Months compared to a cash outflow in the Previous Nine Months of $6.6 million attributed to:
o Payments made to close out the hedge book in the Previous Nine Months of $19.1 million.
o The increase in receipts from gold sales of $40 million as a result of sale of 15,698 ounces from the Gold Ridge Operations contributing $28 million of the increase, no Simberi hedgebook adjustment ($9 million) and a higher average gold price realised in the current nine months was partially offset by the increase in payments to suppliers and employees of $29 million mainly due to higher operating expenditure and due to the costs associated with moving to the main board of the London Stock Exchange.
·; Proceeds from equity raisings of $95.6 million (net of capital raising costs) in the Nine Months compared to $43.3 million debt finance in the Previous Nine Months.
·; Cash used by investing activities decreased from $121.1 million in the Previous Nine Months to $96.2 million in the Nine Months due primarily to capital expenditure on property, plant and equipment in relation to Gold Ridge Project which commenced in April 2010. The project entered the production phase on July 1, 2011.
Liquidity and Capital Resources
September 30 | December 31 | ||
2011 | 2010* | ||
US$ 000 | US$000 | ||
Assets | |||
Cash and cash equivalents | 48,548 | 39,194 | |
Trade and other receivables and other assets | 7,975 | 6,006 | |
Inventories | 71,749 | 22,911 | |
Non-Current Assets | 505,588 | 432,009 | |
Total Assets | 633,860 | 500,120 | |
Liabilities | |||
Current Liabilities | 87,387 | 29,075 | |
Non-Current Liabilities | 33,294 | 56,574 | |
Total Liabilities | 120,681 | 85,649 | |
Net Assets | 513,179 | 414,471 | |
Working Capital(excludes Non Current Assets and Liabilities) | 40,885 | 39,036 |
*Restated as a result of adoption of functional currency effective July 1, 2011.
Cash and Cash equivalents
Allied Gold's cash position as at September 30, 2011 was $48.5 million in available cash and cash equivalents, compared with $83.1 million as at June 30, 2011 and $39.2 million as at December 31, 2010. The increase to June was primarily attributable to completion of a $95.6 million (net of transaction fees) placement in April 2011 of new ordinary shares in the former holding company Allied Gold Limited to institutional and sophisticated investors. The decrease to September 30 is due to expenditure on capital equipment at both Gold Ridge and Simberi.
The Company will continue to monitor cash resources against expenditure forecasts associated with implementation of the Company's development to assess financing requirements.
Working Capital position
As at 30 September 2011, Allied's current assets exceeded its current liabilities by $41 million (December 2010: current assets exceeded its current liabilities by $39 million).
Inventories
Inventory balance of $71.8 million at 30 September 2011 comprises the following:
·; Gold inventories of $18.0 million at Simberi and $15.8 million at Gold Ridge.
·; Parts and consumables inventories totaling $13.2 million at Simberi and $24.8 million at Gold Ridge. The Gold Ridge consumables inventory was included in Assets under construction in December 2010 and was reclassified to current assets in March 2011, as the project moved from construction to operations. The September 2011 balance for Gold Ridge is higher as part of the build up in inventories during the ramping up to full production and a temporary build up in critical consumables inventories in anticipation of the seasonal congestion that occurs in the Group's supply chain over the Christmas / New Year period.
Property, plant and equipment
Increase during the nine months to September 2011 was due to approximately $25 million capital expenditure on Simberi and $82 million spent on the Gold Ridge redevelopment (amounts prior to June 30, 2011 are converted to USD at functional currency rate). This was partially offset by depreciation charges for the period.
Trade and other payables
Included in current liabilities is trade and other payables of $40.9 million (December 2010: $15.4 million). The increase in trade and other payables from December 2010 to September 2011 reflects a higher underlying trade creditors balances now that the Group has two operating mines in its portfolio. In addition trade creditors at September 30 reflects the impact of higher than normal purchasing activity as the Gold Ridge site builds its inventories as ramp up to full operating capacity continues.
Borrowings
Total borrowings of $55.9 million include finance lease facilities and interest bearing loans. Finance lease liability relates to facilities provided for mining equipment by Bank of South Pacific Limited ("BSP"), Caterpillar Finance ("Caterpillar") and Atlas Copco Finance Pty Ltd ("ACF"). The BSP and Caterpillar leases are secured by a fixed and floating charge over the assets of Simberi Gold Mining Limited and by a guarantee provided by a related entity within the group. The ACF lease is secured by a charge over the leased equipment and by a guarantee provided by a related entity within the group. The facilities were fully drawn as at reporting date.
Interest bearing loans relate to a $35 million facility provided to the Group by the International Finance Corporation Limited. The facility is secured by a fixed and floating charge over the assets of Gold Ridge Mining Limited and by a guarantee provided by Allied Gold Limited. The loan has been classified as current as the Company has announced its intention to repay this debt within the next 12 months. The funds drawn down have been utilized to meet capital expenditure incurred as part of the redevelopment of the Gold Ridge Project.
Provisions
During the period the Group engaged an independent consultant to prepare a revised estimate of the cost of rehabilitating and restoring the environmental disturbance at the Gold Ridge Project. Based on the independent consultant's report and a discount rate of 13%, the provision for rehabilitation and restoration for the Gold Ridge Project was increased by $11 million as at June 30 2011. The increase in provisions also includes unwinding of the present value discount on the Group's environmental provisions.
Finance Activities, Liquidity and Capital Resources
Allied Gold's cash position as at September 30, 2011 consists of $48.5 million in available cash and cash equivalents. In addition the Group had 4,341 ounces of gold at refinery at September 30, 2011.
During the past three years, the Company has principally funded its activities through equity raisings. The Company raised $171.2 million in December 2009 and a further $100 million in April 2011 through placements of new ordinary shares to institutional and sophisticated investors to improve Simberi's operational efficiency and expand Simberi production and working capital and to redevelop the Gold Ridge mine.
The Company's financial commitments and contingent liabilities are generally limited to controllable expenditures at the Simberi Project and the Gold Ridge Redevelopment Project. The company's material financial commitments and contingent liabilities as of September 30, 2011 are as follows:
·; Leases for office premises, operating leases for various plant and machinery and payments for the charter of aircraft under non-cancellable operating leases expiring within 1 to 7 years, in the amount of $3.5 million.
·; Commitments in relation to finance leases for the hire of mining equipment expiring within 1 to 5 years, in the amount of $22 million.
·; Capital expenditure commitments of $5.0 million for the Gold Ridge Project, $6 million on the Simberi Plant expansion and $0.3 million on the Oxide Feasibility Study.
The above commitments are to be funded through the capital raised as noted previously and operating cash flows generated from the Simberi and Gold Ridge Projects.
Summary of Quarterly Results
Consolidated | 30 Sep 11 | 30 Jun 11 | 31 Mar 11 | 31 Dec 10 | 30 Sep 10 | 30 Jun 10 | 31 Mar 10 | 31 Dec 09 | |
Financial metrics* | |||||||||
Revenue |
$m | 54.7 | 23.0 | 23.6 | 22.3 | 21.6 | 21.0 | 16.0 | 17.2 |
Income / (loss) for the Quarter |
$m | 3.8 | (4.6) |
1.6 |
8.9 |
1.2 | 38.8 | (3.7) | (16.4) |
Operational metrics** | |||||||||
Ore mined |
tonnes | 1,135,878 | 898,950 | 590,250 | 735,916 | 594,497 | 552,420 | 439,322 | 495,121 |
Ore processed |
tonnes | 988,692 | 980,025 | 423,773 | 583,031 | 570,473 | 544,317 | 439,318 | 482,865 |
Gold produced |
ounces | 36,085 | 28,344 | 12,728 | 18,921 | 18,206 | 18,109 | 14,738 | 17,456 |
Gold sold |
ounces | 31,034 | 21,281 | 16,034 | 16,621 | 16,935 | 16,526 | 14,065 | 17,971 |
* The June 11 quarter was a commissioning quarter for the Gold Ridge operations and all production costs were capitalized, net of any revenue that was generated from gold sales and hence not included in the financial metrics.
**includes Gold Ridge from March 2011 quarter.
The three months ended September 30, 2009 was the first Quarter in respect of which Allied (being Allied Gold Mining Plc or its predecessor holding company Allied Gold Limited) was required to file a Quarterly report as a reporting issuer.
The following are the key factors that have impacted the Quarterly performance for the periods presented in the above table:
·; The loss of $4.6 million for the three months to June 30, 2011 mostly relates to the Group restructure associated with the Company moving to the Main Market of the LSE ($4 million) and higher cost of sales from Simberi operations at $1,206 per ounce due to deferred March quarter 2011 costs that were included in gold and ore stocks as a consequence of the shutdown of the Simberi processing operations in March 2011. Simberi operations produced 18,131 ounces and Gold Ridge operations producing 10,213 ounces for the June quarter. The June quarter was a commissioning quarter for the Gold Ridge operations, and as previously advised, all production costs were capitalized, net of any revenue that was generated from gold sales (and hence not included in the financial metrics above). Gold Ridge commenced recognizing revenue and production costs into the statement of comprehensive income effective from July 1, 2011.
·; The three months ended March 31, 2011 showed lower production than the preceding quarters due to approximately four weeks of lost production as a result of repairs being carried out on tailings mixing tank and additional monitoring and bundling of the tailings mixing tank disposal system at the Simberi operations.
·; The three months ended December 31, 2010 included a gain of $4.3 million on the extinguishment of a liability for less than its book value and a $1.6 million writeback of share based remuneration expense in relation to Executive options that were cancelled due to performance based vesting conditions attached to those options not being satisfied.
·; The three months ended June 30, 2010 included a $39.4 million gain on the acquisition of Australian Solomons Gold ("ASG"). If this gain is excluded, the loss for the three months was $3.2 million.
·; The three months ended March 31, 2010 showed significantly lower production than the preceding and succeeding quarters due to approximately four direct lost days of production and a further period of sub capacity as a result of an illegal cease work order which directly impacted gold production for the quarter and the loss of a further eight days production during the quarter resulting from a structural mechanical failure of the scrubber trommel processing equipment at the Simberi operations.
·; The three months ended December 31, 2009 included share based remuneration expense of $6.5 million and expenses totalling $1.6 million that were incurred in relation to the acquisition of ASG. If these amounts are excluded the loss for the three months was $7.6 million.
Financial and Other Instruments
In the normal course of its operations, Allied is exposed to gold price, foreign exchange, interest rate, liquidity, equity price and counterparty risks. In order to manage these risks, the company may enter into transactions which make use of both on and off balance sheet derivatives. Allied Gold does not acquire, hold or issue derivatives for trading purposes. The company's management of financial risks is aimed at ensuring that net cash flows are sufficient to meet all its financial commitments as and when they fall due and to maintain the capacity to fund its forecast project development and exploration strategy by: (i) safeguarding the Company's core earnings stream from its major assets through the effective control and management of financial risk; (ii) effective and efficient usage of credit facilities through the adoption of reliable liquidity management planning and procedures; and (iii) ensuring that investment and hedging transactions are undertaken with creditworthy counterparts.
In order to protect against the impact of falling gold prices, the company may enter into hedging transactions which provide a minimum price to cover non-discretionary operating expenses, repayments due under the company's financing facilities and sustaining capital. As at September 30, 2011 the Group was unhedged in respect of gold prices.
The company operates internationally and is exposed to foreign exchange risk arising from various currency exposures primarily with respect to the Papua New Guinea Kina, Solomon Islands dollar and the Australian dollar. In April 2011, the Company entered into a forward contract to purchase US$37 million at an exchange rate of A$/US$1.0645 to be settled in November 2011. The contract was entered to hedge Allied's exposure to currency risk on the planned early payment of its USD denominated International Finance Corporation Limited loan utilizing Australian dollar proceeds from the April 2011 equity raising. At the reporting date the exchange rate was A$/US$0.9669 giving rise to an unrealized gain of $3.3 million.
The company has exposure to interest rate risk on its borrowings from International Finance Corporation and interest earnings on cash deposits. No hedging programs were implemented by the company to manage interest rate risk during the quarter or the Nine Months.
The company is exposed to equity securities price risk arising from investments classified on the balance sheet as available for sale. Investments in equity securities are approved by the Board on a case-by-case basis. The majority of the Company's available for sale equity investments are in junior resource companies listed on the ASX.
The company is exposed to counterparty risk being the risk that a counterparty will not complete its obligations under a financial instrument resulting in a financial loss for the company. The company does not generally obtain collateral or other security to support financial instruments subject to credit risk, but adopts a policy of only dealing with credit worthy counterparties. Trade and other receivables mainly comprise banking institutions purchasing gold under normal settlement terms of two working days. Counterparty risk under derivative financial instruments is to reputable banking institutions. All significant cash balances are on deposit with banking institutions that are members of highly rated major Australian banking groups. The carrying amount of financial assets recorded in the financial statements represents the Company's maximum exposure to credit risk without taking account of the value of any collateral or other security obtained.
The company's liquidity position is managed to ensure sufficient liquid funds are available to meet its financial obligations in a timely manner. The company manages liquidity risk by continuously monitoring forecast and actual cash flows and ensuring that the company has the ability to access required funding.
Off-Balance Sheet Arrangements
The company had no off-balance sheet arrangements as at September 30, 2011.
Related Party Transactions
Remuneration (including fees and the issue of share options) was paid or is payable to the directors of the Company in the normal course of business. In addition, the company had the following related party transactions during the quarter:
• Mr. Caruso is a director and shareholder of Mine Site Construction Services Pty Ltd., which provides the Group with various services, the supply or procurement on behalf of the Group of goods and services and the provision of operating personnel. There were no amounts paid or payable to Mine Site Construction Services Pty Ltd. in relation to the supply of equipment and materials in the quarter and A$62,268 in the Previous Quarter.
Director options and shareholdings
The table below provides summary movements in Directors' holding of shares and options in the nine months ended September 30, 2011.
Options
Balance at start of period(1) | Granted as remuneration | Exercised | Lapsed | Balance at end of the period | Vested and exercisable | |
M Caruso | 4,812,499 | - | - | - | 4,812,499 | 4,312,499 |
S Harvey | - | 249,999 | - | - | 249,999 | 166,666 |
M House | 249,999 | - | - | - | 249,999 | 166,666 |
A Lowrie | 291,666 | - | - | - | 291,666 | 208,333 |
G Steemson(2) | 291,666 | - | - | - | 291,666 | 208,333 |
F Terranova | 2,583,332 | - | - | - | 2,583,332 | 2,374,999 |
8,229,162 | 249,999 | - | - | 8,479,161 | 7,437,496 |
1. Adjusted for 1 for 6 share consolidation which was undertaken on June 30, 2011 as part of the Option Scheme Arrangement as approved by shareholders on June 6, 2011.
On June 30 2011, Allied Gold Limited successfully implemented the Share and Option Schemes of Arrangement whereby Allied Gold Mining PLC became the holding company of the Group. Under the Schemes of Arrangement, Allied Gold Limited's shares and options on issue as at June 30, 2011 were exchanged on a six for one basis to Allied Gold Mining PLC shares and options. Allied Gold Mining PLC was admitted to the premium listing segment of the ("Official List") of the London Stock Exchange PLC ("LSE") and commenced trading the LSE's main market for listed securities (Main Market") on June 30, 2011. At admission, Allied Gold Mining PLC had issued capital of 199,755,017 shares and 10,172,904 options on issue.
2. Mr. Steemson resigned from his position as a director on August 12, 2011. Movements are shown to the date at which he ceased to be a director.
3. In the period between September 30 and the date of this MD&A a total of 1,992,498 options were exercised by Directors excluding Mr Steemson.
The terms and conditions of the grant made during the nine months ended September 30, 2011 are as follows:
Non Executive Director Options issued 20 June 2011
During the June quarter, 249,999 unlisted options (adjusted for the 1 for 6 share consolidation) were issued to Mr. Harvey having received shareholder approval at the Extraordinary General Meeting on June 6, 2011.
No vesting conditions | Vesting condition1 | |||
Fair value at grant date | A$0.04424 | A$0.00884 | ||
Exercise price | $0.50 | $0.50 | ||
Grant date | 20/06/2011 | 20/06/2011 | ||
Expiry date | 31/12/2011 | 31/12/2011 | ||
Share price at grant date | $0.505 | $0.505 | ||
Expected price volatility of shares | 25% | 25% | ||
Expected dividend yield | 0% | 0% | ||
Risk free interest rate | 4.8% | 4.8% | ||
Probability discount applied in relation to vesting conditions | 0% | 80% | ||
Number of options | 1,000,000 | 500,000 |
The basis for valuation is as per thegrant date. On June 30 2011, Allied Gold Limited successfully implemented the Share and Option Schemes of Arrangement whereby Allied Gold Mining PLC became the holding company of the Group and Allied Gold Limited's shares and options on issue were exchanged on a six for one basis to Allied Gold Mining PLC shares and options. Details of options issued pursuant to implementation of Option Schemes Arrangements were:
No vesting conditions | Vesting condition 1 | |||
Number of options | 166,666 | 83,333 | ||
Exercise price | £1.80 | £1.80 |
1 At the time of issue the vesting condition was that, options may not vest until the ordinary share price of the Allied Gold Limited's shares is greater than A$0.70 for five consecutive days after the date of grant. Under the option scheme approved by shareholders on June 6, 2011 the vesting condition is that, options may not vest until the ordinary share price of Allied Gold PLC's shares is greater than £2.56 on five consecutive days after the date of grant.
Shares
Balance at start of period (1) | Received as remuneration | Options exercised | Balance at end of the period | |
M Caruso | 1,280,864 | - | - | 1,280,864 |
S Harvey | 33,333 | - | - | 33,333 |
M House | 1,666 | - | - | 1,666 |
A Lowrie | 272,577 | - | - | 272,577 |
G Steemson(2) | 183,333 | - | - | 183,333 |
F Terranova | 166 | - | - | 166 |
1,771,939 | - | - | 1,771,939 |
(1)Adjusted for 1 for 6 share consolidation which was undertaken on June 30, 2011 as part of the Option Scheme Arrangement as approved by shareholders on June 6, 2011.
On June 30 2011, Allied Gold Limited successfully implemented the Share and Option Schemes of Arrangement whereby Allied Gold Mining PLC became the holding company of the Group. Under the Schemes of Arrangement, Allied Gold Limited's shares and options on issue as at June 30, 2011 were exchanged on a six for one basis to Allied Gold Mining PLC shares and options. Allied Gold Mining PLC was admitted to the premium listing segment of the ("Official List") of the London Stock Exchange PLC ("LSE") and commenced trading the LSE's main market for listed securities (Main Market") on June 30, 2011. At admission, Allied Gold Mining PLC had issued capital of 199,755,017 shares and 10,172,904 options on issue.
(2)Mr. Steemson resigned from his position as a director on August 12, 2011. Movements are shown to the date at which he ceased to be a director.
Significant Accounting Policies and Estimates
Changes in accounting policies
The accounting policies applied by the Group in this interim consolidated financial report are the same as those applied by the Group's audited financial statements for six months ended December 31, 2010 as included in the Allied Gold Mining PLC Prospectus dated June 17, 2011 except for the following:
Merger accounting
The accounting treatment in relation to the addition of Allied Gold Mining PLC as a new UK holding company of the Group falls outside the scope of the International Financial Reporting Standards 3- Business Combination. The Share Scheme arrangement constitutes a combination of entities under common control as Allied Gold PLC was not a business in accordance with the standard at the time that the Share Scheme became effective. The relative rights of the shareholders remain unaltered post transaction.
Paragraph 10 of International Accounting Standards 8-Accounting Policies, Changes in Accounting Estimates and Errors requires management to use its judgment in developing and applying a policy that is relevant, reliable, represents faithfully the transaction, reflects the economic substance of the transaction, is neutral, is prudent, and is complete in all material respects when selecting the appropriate methodology for the consolidation accounting.
Paragraph 13 of the Financial Reporting Standard 6 ("FRS")- Acquisitions and Mergers (UK) permits merger accounting as a result of a group reconstruction when an addition of a new parent company does not alter the relative rights of the shareholders and facilitated entirely by a share for share exchange.
Management believes that it has met the criteria as defined by paragraph 13 of FRS-6 and treated the insertion of Allied Gold Mining PLC as a group reconstruction and have applied the FRS-6 merger accounting principles to prepare the interim consolidated financial statements and treated the reconstructed group as if it had always been in existence.
The consolidated interim financial statements of Allied Gold Mining PLC has been prepared as if the Company had always been the holding company of the Group and as such the results for the three and nine months to September 2011 including comparatives results are of the Allied Gold Limited consolidated group.
Functional currency
Prior to June 30, 2011 the functional currency of the Allied Gold Group was Australian dollars. Allied Gold Mining PLC reported its June 30, 2011 interim consolidated results using United States dollars as its presentation currency.
As part of the transition to a United Kingdom (UK) incorporated Company and being listed on the London Stock Exchange (LSE), Toronto Stock Exchange (TSX) and Australian Securities Exchange (ASX), the Company reassessed its functional currency for financial reporting purposes. As an international gold producer, explorer and developer, the currency of the primary economic environment in which the Company operates is United States dollars as it is the currency of the global economy. As of July 1, 2011, the Company and each of its subsidiaries have adopted the United States ($) dollars as their functional currency.
IAS 21 requires that "The effect of a change in functional currency is accounted for prospectively. In other words, an entity translates all items into the new functional currency using the exchange rate at the date of the change. The resulting translated amounts for non-monetary items are treated as their historical cost."
The Company adopted the change in functional currency as at July 1, 2011. The functional currency rate applied was US$/A$ 1.0742, hence all statement of financial position and statement of comprehensive income items previously reported in Australian dollars ( being the former functional currency) as at and for the periods up to and including June 30, 2011 were translated into US$ using an exchange rate of 1.0742.
Allied Gold PLC reported its results for the six months to June 30, 2011 using United States dollars as its presentation currency and in doing so translated items included in the statement of comprehensive income into US$ at the average exchange rate for the relevant quarter The table below highlights the significant differences arising from the use of different exchange rates for for translation into the US$presentation currency as at June 30, 2011 and to account for the adoptation of the US$ as the functional currency effective July 1, 2011.
6 Months to June 30, 2011 | |||
Presentation currency basis of translation
$000 | Functional currency basis of translation $000 | Difference
$000 | |
Statement of Comprehensive Income | |||
Revenue | 44,712 | 46,673 | 1,961 |
Cost of sales | (37,421) | (38,954) | (1,533) |
Gross profit | 7,291 | 7,719 | 428 |
Other expenses | (10,355) | (10,707) | (352) |
Loss for the period after tax | (3,064) | (2,988) | 76 |
| |||
Statement of Financial Position | As at 30 June 2011 | ||
Cash and cash equivalents | 83,076 | 83,076 | - |
Other current assets | 59,709 | 59,487 | (222) |
Non- current assets | 501,018 | 499,159 | (1,859) |
Current liabilities | 103,268 | 102,885 | 383 |
Non- current liabilities | 33,897 | 33,771 | 126 |
Net Assets | 506,638 | 505,066 | (1,572) |
Contributed equity | 423,060 | 493,241 | 70,181 |
Reserves | 18,239 | 22,261 | 4,022 |
Foreign currency translation reserve | 74,544 | (820) | (75,364) |
Accumulated losses | (9,205) | (9,616) | (411) |
Total Equity | 506,638 | 505,066 | (1,572) |
Significant estimates and judgements
The preparation of the interim consolidated financial report in accordance with International Financial Reporting Standards as adopted by the European Union (EU-IFRS) requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. These estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
In preparing this interim consolidated financial report, the significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the audited financial statements for six months ended December 31, 2010 as included in the Allied Gold Mining PLC Prospectus dated June 17, 2011.
Exploration and Evaluation Expenditure
Exploration and evaluation expenditure comprises costs that are directly attributable to researching and analysing existing exploration data, conducting geological studies, exploratory drilling and sampling; examining and testing extraction and treatment methods; and/or compiling prefeasibility and feasibility studies. Exploration expenditure relates to the initial search for deposits with economic potential. Evaluation expenditure arises from a detailed assessment of deposits that have been identified as having economic potential.
Exploration and evaluation expenditure (including amortisation of capitalised licensecosts) is charged to the income statement as incurred except in the following circumstances, in which case the expenditure may be capitalised:
• The exploration and evaluation activity is within an area of interest for which it is expected that the expenditure will be recouped by future exploitation or sale; or
• At the balance sheet date, exploration and evaluation activity has not reached a stage which permits a reasonable assessment of the existence of commercially recoverable reserves.
• Capitalized exploration and evaluation expenditure considered to be tangible is recorded as a component of property, plant and equipment at cost less impairment charges. Otherwise, it is recorded as an intangible asset. As the asset is not available for use, it is not depreciated. All capitalized exploration and evaluation expenditure is monitored for indications of impairment. Where a potential impairment is indicated, assessment is performed for each area of interest in conjunction with the group of operating assets (representing a cash generating unit) to which the exploration is attributed. Exploration areas at which reserves have been discovered that require major capital expenditure before production can begin are continually evaluated to ensure that commercial quantities of reserves exist or to ensure that additional exploration work is under way or planned. To the extent that capitalised expenditure is not expected to be recovered it is charged to the income statement
• Cash flows associated with exploration and evaluation expenditure (comprising both amounts expensed and amounts capitalised) are classified as investing activities in the cash flow statement.
Development Expenditure
When proved reserves are determined and development is justified, capitalised exploration and evaluation expenditure is reclassified as "Other Mineral Assets", and is disclosed as a component of property, plant and equipment. Development expenditure is capitalised and classified as "Other Mineral Assets". The asset is not depreciated until construction is completed and the asset is available for use.
Outstanding Securities Data
At September 30, the Company has issued and outstanding an aggregate of 199,761,267 ordinary shares and 10,166,654 options to acquire ordinary shares. Details of movements in Company's outstanding options during the nine months ended September 30, 2011 are as follows:
Exercise Price(1) | Maturity | Options outstanding at 1 January 2011(1) | Options issued(1) | Options expired or cancelled(1) | Options exercised | Options outstanding at 30 September 2011(1) | Vested(1) | Unvested(1) (2) |
£1.26 | 31/10/2011 | 2,483,328 | - | (68,750) | (6,250) | 2,408,328 | 1,687,500 | 720,828 |
£1.26 | 30/11/2011 | 2,062,498 | - | - | - | 2,062,498 | 1,395,832 | 666,666 |
£1.26 | 31/12/2011 | 249,999 | - | - | - | 249,999 | 166,666 | 83,333 |
£1.80 | 31/12/2013 | 4,999,999 | - | - | - | 4,999,999 | 4,999,999 | - |
£1.80 | 31/12/2013 | 195,831 | - | - | - | 195,831 | 195,831 | - |
£1.80 | 31/12/2011 | - | 249,999 | - | - | 249,999 | 166,666 | 83,333 |
9,991,655 | 249,999 | (68,750) | (6,250) | 10,166,654 | 8,612,494 | 1,554,160 |
1. Adjusted for 1 for 6 share consolidation which was undertaken on June 30, 2011 as part of the Option Scheme Arrangement as approved by shareholders on June 6, 2011.
On June 30 2011, Allied Gold Limited successfully implemented the Share and Option Schemes of Arrangement whereby Allied Gold Mining PLC became the holding company of the Group. Under the Schemes of Arrangement, Allied Gold Limited's shares and options on issue as at June 30, 2011 were exchanged on a six for one basis to Allied Gold Mining PLC shares and options. Allied Gold Mining PLC was admitted to the premium listing segment of the ("Official List") of the London Stock Exchange PLC ("LSE") and commenced trading the LSE's main market for listed securities (Main Market") on June 30, 2011. At admission, Allied Gold Mining PLC had issued capital of 199,755,017 shares and 10,172,904 options on issue.
2. Unvested options will vest upon the share price trading at or above £2.56 on 5 consecutive trading days.
3. Each option is convertible into one ordinary share in the Company when exercised. Options do not participate in dividends and do not give holders voting rights.
4. In the period between 30 September and the date of this MD&A a total of 2,979,164 shares were issued pursuant to the exercise of options with an exercise price of £1.26 maturing prior to December 31, 2011.
Disclosure Controls and Procedures and Internal Controls over Financial Reporting
The Company maintains appropriate information systems, procedures and controls to ensure that information used internally and disclosed externally is complete and reliable. The Company is continuing to review and develop appropriate disclosure controls and procedures and internal controls over financial reporting for the nature and size of the Company's business.
Disclosure Controls and Procedures
The Company's disclosure controls and procedures ("DCP") are designed to provide reasonable assurance that all relevant information is communicated to the Company's senior management to allow timely decisions regarding disclosure. Access to material information regarding the Company is facilitated by the small size of the Company's senior management team and workforce. The Company is continuing to develop appropriate DCP for the nature and size of the Company's business.
Internal Controls over Financial Reporting
Internal controls over financial reporting ("ICFR") are designed to provide reasonable assurance regarding the reliability of the Company's financial reporting and the preparation of financial statements in compliance with Australian IFRS. The Board is responsible for ensuring that management fulfills its responsibilities in this regard. The Audit Committee fulfills its role of ensuring the integrity of the reported information through its review of the interim and annual financial statements. The Chief Executive Officer and Chief Financial Officer, with participation of the Company's management, have concluded that there were no material weaknesses at the end of the Quarter or changes to the Company's internal controls during the Quarter which have materially affected, or are considered to be reasonably likely to materially affect, the Company's ICFR.
Limitations of Controls and Procedures
The Company's management, including the Chief Executive Officer and Chief Financial Officer, believe that any DCP or ICFR, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, they cannot provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been prevented or detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by unauthorized override of the control. The design of any systems of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Accordingly, because of the inherent limitations in a cost effective control system, misstatements due to error or fraud may occur and not be detected.
Risk factors
The Company is subject to a number of risk factors could adversely affect the Company's future business, operations and financial condition. For a discussion of risk factors which could affect the Company, see the Company's Annual Information Form available at www.sedar.com and "Risk Factors" and in the Company's Prospectus dated June 17, 2011 under the section entitled "Risk Factors".
Cautionary Note Regarding Forward-Looking Statements
This MD&A contains "forward-looking statements" which may include, but are not limited to, statements with respect to the future financial or operating performance of Allied Gold, its subsidiaries and their projects, the future price of gold, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital, operating and exploration expenditures, costs and timing of the development of new deposits, costs and timing of future exploration, requirements for additional capital, government regulation of mining operations, environmental risks, reclamation and rehabilitation expenses, title disputes or claims, limitations of insurance coverage and the timing and possible outcome of pending litigation and regulatory matters. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes", or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might", or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Allied Gold and/or its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, those factors discussed in the section entitled "Risk Factors" in this short form prospectus and the documents incorporated by reference herein. Although Allied Gold has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking statements contained herein are made based on the opinions and estimates of management as at the date the statements are made, and Allied Gold disclaims any obligation to update any forward-looking statements except as required by law, whether as a result of new information, estimates or opinions, future events or results or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
Qualified Person
The Technical and Scientific information contained in this news release was reviewed by Mr Colin Ross Hastings, MSc, BSc Geology, M.Aus.I.M.M., Allied's General Manager Resource Development and the Qualified Person as defined by National Instrument 43-101 of the Canadian Securities Administrators responsible for the development programs. Additionally 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 release in the form and context in which it appears.
The information in this Stock Exchange Announcement that relates to Mineral Exploration results, together with any related assessments and interpretations, have been verified by and approved for release by Mr P R Davies, MSc, BSc, M.Aus.I.M.M., a qualified geologist and full-time employee of the Company. Mr Davies 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 Davies consents to the inclusion of the information contained in this release in the form and context in which it appears. Mr Davies is also a qualified person as defined by Canadian National Instrument 43-101.
Competent Persons
The information in this Stock Exchange Announcement that relates to Mineral Exploration results and Mineral Resources, together with any related assessments and interpretations, have been verified by and approved for release by Mr P R Davies, MSc, BSc, M.Aus.I.M.M., a qualified geologist and full-time employee of the Company. Mr Davies 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 Davies consents to the inclusion of the information contained in this release in the form and context in which it appears. Mr. Davies is also a Qualified Person as defined by Canadian National Instrument 43-101.
Glossary of terms used in the Announcement:
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.
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.
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.
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.
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
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.
Tuff- A rock composed of pyroclastic materials that have been ejected from a volcano. In many instances these fragments are still hot when they land, producing a "welded" rock mass.
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.
Mt- Million Tonnes
Moz - Million Ounces
Andesite- A fine-grained, extrusive igneous rock composed mainly of plagioclase with other minerals such as hornblende, pyroxene and biotite.
Ordinary kriging (OK) - is a geostatistical approach to modeling. Instead of weighting nearby data points by some power of their inverted distance, OK relies on the spatial correlation structure of the data to determine the weighting values. This is a more rigorous approach to modeling, as correlation between data points determines the estimated value at an unsampled point.
Related Shares:
ALD.L