29th Apr 2008 11:29
Allied Gold Limited29 April 2008 For immediate release 29 April 2008 ALLIED GOLD LIMITED ("ALLIED" OR "THE COMPANY") QUARTERLY REPORT FOR THE PERIOD ENDED 31 March 2008 As required by the rules of the ASX, the Company has announced its quarterly report for the period ended 31 March 2008. HIGHLIGHTS • Allied Gold's 100% owned Simberi Oxide Gold Project, located in offshore Papua New Guinea, produced first gold in February 2008 • Simberi produced 18,895 oz of gold for the March quarter at a cash cost of AUD$363 per oz • Letter of Intent signed with Barrick Gold Corporation (Barrick), the world's pre-eminent gold producing Company, whereby Barrick will individually fund up to AUD$20 million of expenditure in order to gain a 70% interest in the exploration licence that encompasses Big Tabar and Tatau Islands • Barrick subscribed for 17,647,059 fully paid ordinary shares in Allied Gold at $0.85 per share upon execution of the Letter of Intent, thereby injecting AUD$15 million into Allied Gold • Drilling continues to deliver highly encouraging results on areas located outside of the current mine plan. Best results previously announced in exploration updates include: - 8m at 5.51 g/t gold from 1m at South Samat - 7m at 4.49 g/t gold from 1m at South Samat - 6m at 3.52 g/t gold from 5m at Sorowar West - 13m at 2.20 g/t gold from surface at Sorowar West - 22m at 2.14 g/t gold from surface at South East Sorowar - 5m at 4.81 g/t gold from 75m at South East Sorowar - 9m at 6.19 g/t gold from 41m at South East Sorowar SIMBERI OXIDE GOLD PROJECT - OPERATIONS The Simberi Oxide Gold Project poured its first gold in early February 2008 andthe production ramp up through its newly constructed process plant at Simbericontinues to progress well. Mining has been centered on the South Samat and East Samat pits. In particularSouth Samat has yielded good grade material, which has assisted in compensatingfor the late commissioning of the processing plant. The gold price received for sales during the March quarter was impacted by thefact that the vast majority of gold sold was delivered into the Company's goldhedging commitments at US$700/oz. Most of the waste mined was related to haul road construction and road sheetingactivities. The EPCM Contractor has been issued with a list of items on the processing plantthat require remediation. Project completion costs are forecast to be AUD$92.1million, some AUD$11.7 million over the original budget. Costs incurred as at 31March were AUD$87.5 million. Construction of the rope conveyor and overland conveyor to the ROM pad, whichwill carry ore from the Sorowar pit, is essentially complete and commissioningis advancing according to plan. EXPLORATION Simberi Island - ML 136 and EL 609 The fourth Company-owned drill rig arrived in January and the smaller diamonddrill (DFM400) completed 67 metres of coring at Samat and 111 metres at Adoratesting an IP anomaly. At the end of the month the rig was converted to auger toundertake grade control drilling. A total of 415 grade control auger holes werecompleted at Samat and Sorowar for a total length of 2,077 metres. The two reverse circulation (RC) drills commenced drilling at Sorowar - southeast, north west and west of the proposed pit. These drills collectivelycompleted 6,492 metres of RC in 71 drill holes at Sorowar and one rig installed8 pre-collars for a total length of 723 metres at Pigiput in preparation fordeep diamond tails targeting sulphides. The multipurpose drill (UDR650) finished RC drilling in the Samat area for atotal length of 580 metres in 13 holes and then, after some scheduledmaintenance, was converted to diamond and commenced drilling at Pigiput as partof the resource definition and exploration program designed by Golder Associatestargeting the underlying sulphide mineralisation. By the end of the quarter onediamond tail had been sorted and 57 metres of core had been drilled. 2,950 metres of IP line was surveyed in January and the crews were dismantledpending analysis of all the IP information gathered to date. A report will beissued in the June quarter. Samat Drilling at Samat South focused on possible extension outside the pit designwith a focus on the area north of the pit. Results of current program (holes RC1436 to RC1440 inclusive) defined additional mineralisation outside the pit. Adora Drilling at Adora was aimed at testing shallow oxide targets and some deepersulphide targets that had been defined by the IP surveys. The drilling revealedthin and scattered gold mineralisation and the IP target did result in goldmineralisation being encountered with a best intersection of 6.9m @ 8.11g/t goldfrom 47.1 metres. Sorowar Drilling at South East Sorowar confirmed the presence of surface andnear-surface gold mineralisation in oxide materials, south east of the Sorowarfinal pit limit. One of the results tables also include results from two MonunCreek holes. Drilling of this area is continuing to define the extents of themineralisation with a plan to undertake a resource estimate. The drilling at Sorowar West has identified a new area of mineralisation locatedwithin 300 to 400 meters of the RopeCon load out terminal. The drill holeintersections to date are extremely encouraging given that the mineralisationcomprises oxide material at surface or near-surface. Drilling will continuenorth towards the Sorowar pit limit and south east. Additionally, drilling has commenced to the north west of the Sorowar pit and todate 22 holes for a total length of 2,314 metres has been completed, stillwaiting assay results. Some exploration assays have been carried out on site in the process laboratorywhile the construction of the exploration assay laboratory and new samplepreparation facility is being finished off, which is expected in the Junequarter. Construction of the new core shed was nearly completed and is ready to receivesamples at one end. The building will be finished in April. FARM-IN & EXPLORATION JOINT VENTURE ON TATAU AND BIG TABAR ISLANDS (EL609) WITHBARRICK GOLD CORPORATION Allied Gold signed a Letter of Intent ("LoI") in March 2008 with a wholly ownedsubsidiary of the world's largest gold mining Company Barrick Gold Corporation("Barrick"). Contained in the LoI is for Barrick to acquire up to a 70% interestin exploration licence 609 on Big Tabar and Tatau Islands, part of the TabarIsland Group Project, through a Farm-in and Joint Venture. Barrick is required to sole fund AUD$8 million of exploration expenditure withinfour years to earn a 51% interest, with another AUD$12 million required withinthe next four year period to earn 70% in the exploration licence. Barrick has committed to a minimum expenditure of AUD$2 million in the first twoyears, but has budgeted to spend US$2.1 million in year one. If Barrickwithdraws at any time after it has met the minimum expenditure but before itearns 51% equity in the joint venture, it will not retain any interest in theexploration licence. Additionally, Barrick subscribed for 17,647,059 shares at $0.85, representing4.7% of the enlarged share capital of the Company, thereby injecting AUD$15million into Allied Gold. The shares issued to Barrick are subject to voluntaryescrow until 28 March 2010 or upon the date that Barrick meets the MinimumExpenditure as set out under the Terms of the LoI. The execution of the agreement provides for a significantly more expedientmanner to further explore, evaluate and exploit the exploration potential onTatau and Big Tabar islands, whilst Allied focuses on optimising performance ofits recently commissioned Simberi Gold Project. Susequent to period-end, Allied Gold has issued 1,000,000 fully paid ordinaryshares to Kennecott Explorations (Australia) Ltd, a 100% owned subsidiary of RioTinto Limited, and 352,112 fully paid ordinary shares to Nuigini Mining asconsideration for relinquishment the each Company's Claw Back right under theoriginal Purchase Agreement to acquire the Simberi Island and Tatua and TabarIslands projects. CORPORATE Cash and Debt At 31 March 2008, Allied Gold Limited had AUD$14.77million cash in hand. TheSimberi Finance Facility was drawn down to AUD$23.4 million at period-end. Gold Hedging Allied has outstanding hedging commitments of 153,630 ounces (ozs) of gold at aneffective price of US$700/oz for delivery between June 2008 and December 2011.The Participating Gold Forward Option that the Company has entered into allowsAllied to participate in any upside in the price of gold for 40% (representing61,452 ozs) of the Company's hedging commitment while remaining protected atUS$700/oz at all times as a worst case on the entire 153,630 ozs hedged. Securities on Issue As at 31 March 2008 issued securities comprise; - 374,833,613 fully paid ordinary shares listed on the Australian Stock Exchange (ASX) and on the London Alternative Investment Market (AIM) - 2,970,000 unlisted options exercisable at $0.50 expiring 11 December 2008 - 1,000,000 unlisted options exercisable at $0.40 expiring 31 December 2008 - 1,000,000 unlisted options exercisable at $0.44 expiring 31 December 2008 - 750,000 unlisted options exercisable at $0.80 expiring 31 December 2008 - 713,261 unlisted options exercisable at $0.72 expiring 30 June 2009 - 590,000 unlisted options exercisable at $0.50 expiring 30 October 2009 During the period, the Company completed two share placements. In JanuaryAUD$10.5 million was raised through the issue of 14,621,844 shares at AUD$0.72per share to existing institutional investors and a further 17,647,059 shareswere issued to a subsidiary of Barrick Gold Corporation at AUD$0.85 per shareraising AUD$15.0 million in March. Additionally, 550,000 shares were issued after the exercise of $0.50 unlistedoptions and 713,261 unlisted options exercisable at $0.72 expiring 30 June 2009were issued to Mirabaud Securities as part consideration for managing theJanuary 2008 share placement. Copies of the full announcement along with the Quarterly Cash flow Report willbe uploaded to the Companies website - www.alliedgold.com.au and can be viewedin due course. The full version of the announcement is also available as a linkto this announcement: http://www.rns-pdf.londonstockexchange.com/rns/3359t_-2008-4-29.pdf For more information:Mark Caruso T:+61 8 93533638Executive ChairmanRoland Cornish T: +44 (0) 20 7628 3396Beaumont Cornish Limited Competent Persons The information in this Stock Exchange Announcement that relates to MineralResources, Project Financial modelling, Mining, Exploration and Metallurgicalresults, together with any related assessments and interpretations, has beenapproved for release by Mr C.R. Hastings, MSc, BSc, M.Aus.I.M.M., a qualifiedgeologist and full-time employee of the Company. Mr Hastings has sufficientexperience which is relevant to the style of mineralisation and type of depositunder consideration and to the activity which he is undertaking to qualify as aCompetent Person as defined in the 2004 Edition of the "Australasian Code forReporting of Exploration Results, Mineral Resources and Ore Reserves". MrHastings consents to the inclusion of the information contained in this releasein the form and context in which it appears. The information in this Stock Exchange Announcement that relates to Ore Reserveshas been compiled by Mr J Battista of Golder Associates who is a Member of theAustralasian Institute of Mining and Metallurgy. Mr Battista has had sufficientexperience in Ore Reserve estimation relevant to the style of mineralisation andtype of deposit under consideration to qualify as a Competent Person as definedin the 2004 Edition of the "Australasian Code for Reporting of ExplorationResults, Mineral Resources and Ore Reserves". Mr Battista consents to theinclusion of the information contained in this release in the form and contextin which it appears. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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