31st Jan 2008 12:56
Allied Gold Limited31 January 2008 For immediate release 31 January 2008 ALLIED GOLD LIMITED ("ALLIED" OR "THE COMPANY") QUARTERLY REPORT FOR THE PERIOD ENDED 31 December 2008 As required by the rules of the ASX, the Company has announced its quarterlyreport for the period ended 31 January 2008. HIGHLIGHTS - Gold production imminent at Allied Gold's 100% owned Simberi Oxide Gold Projectlocated in offshore Papua New Guinea. First gold production is anticipated inFebruary 2008. - Project construction is complete and commissioning is well advanced, withteething problems associated with mechanical and electrical equipment failuresessentially ironed out. - Exploration activities on target areas located outside of the current mine plan continue to deliver highly encouraging results. Best results include: - 35m at 2.35 g/t gold from surface - 1m at 5.36 g/t gold from 69m - Geophysical and soil geochemical surveys on Simberi, Tatau and Big Tabar islandscontinue to identify new drill targets. - Subsequent to quarter-end, Allied Gold raised approximately AUD$10.5 millionthrough an institutional share placement to existing shareholders. These fundswere applied to project development expenditure as an alternative to drawingdown further on the existing Finance Facility, and were raised at a share priceof AUD$0.72. - Richard Johnson was appointed as Chief Executive Officer in early January 2008. OXIDE MINE DEVELOPMENT AND PROJECT CONSTRUCTION The Simberi Oxide Gold Project is a Stage 1 open-pit mining project which willextract ore from at least seven deposits which represent the known surface andnear-surface oxidised caps to underlying sulphide gold mineralisation on easternSimberi Island. After the initial delivery of ore by standard truck haulage, oredelivery will be by an aerial rope conveyor to a conventional CIL(carbon-in-leach) processing facility. Allied has current total Oxide / Sulphide Resources of 2,389,000 ounces of goldof which 783,000 ounces of oxide and transitional gold reserves and mineralresources are within designed open pits. The project is fully permitted and hasthe support of local landowner groups and Government. The project is in the final stages of commissioning after dry commissioningactivities commenced in December 2007. There have been minor teething issuesmainly relating to the failure of mechanical and electrical equipment which hasresulted in first gold production being delayed whilst these issues have beenremedied. Allied Gold is disappointed by the delays in project commissioning and isaddressing these issues with the EPCM contractor. The Company has mobilisedadditional project management staff to site to assist in achieving goldproduction as soon as possible. The contractor has been requested to provide an updated completion schedule,focusing on manning and resource requirements including a demobilization plan,for Allied's review in order to ensure that further construction scheduleslippage is minimised. Another notable issue has been the breakdown in the logistics supply of a numberof outstanding items required to complete commissioning of the processing plant. Allied Gold management are advancing discussions with the construction team toensure timely completion of all outstanding items and are confident that theseissues are being addressed. EXPLORATION SIMBERI ISLAND - ML 136 and EL 609 The third of the four drilling rigs arrived at Site in mid-December 2007. Thefourth rig is scheduled to be delivered in the March 2008 quarter. Drilling during the quarter comprised 1,198 metres of diamond drilling in 8holes and 2,195 metres of RC drilling in 39 holes. Drilling was undertakenwithin the Monun, Adora and Patan areas. Assay results for diamond core holes at Monun (located south-east of the Sorowarpit) have been received and highly encouraging intercepts were recorded asfollows: - 35m at 2.35 g/t gold from surface - 1m at 5.36 g/t gold from 69m Hole TIG Co-ordinates RL Dip/Az. From To Intercept Au Oxidization (m) (m) (m) (m) (g/t) mN mE MN006 20969617 44672.49 116.68 -60/270 0.0 138.6 138.6 0.82 OX, SU 0.0 35.0 35.0 2.35 OX 69.0 70.0 1.0 5.36 SU Note: For MN006 - assaying for gold by fire assay (50gm) with AAS finish (ALS Chemex-Townsville laboratory, Queensland) Simberi mineralization types are:Ox = oxide material - extremely weathered (average cyanide recovery >90%) Tr = transitional material - distinctly weathered (average cyanide leachrecovery 50 - 90%) Su = sulfide material - slightly weathered to fresh (average cyanide leachrecoveryRelated Shares:
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