17th Jun 2009 07:00
For immediate release 17 June 2009
ALLIED GOLD LIMITED
("ALLIED" OR "THE COMPANY")
ALLIED GOLD ACHIEVES 100,000th OUNCES PRODUCTION MILESTONE AT SIMBERI ISLAND
HIGHLIGHTS
This achievement represents a significant milestone for Allied Gold and comes just 16 months after the first gold was produced at the Simberi Island project in February 2008.
This production landmark also caps an outstanding year of achievement for Allied in the face of challenging operating conditions and the global financial crisis.
Achievements since first production include:
On track to achieve in excess of 70,000oz in FY2009-10 whilst in ramp up phase.
US$25 million Project Debt Facility retired 21 months ahead of schedule.
Residual hedge book reduced to less than 60,000oz.
45% increase in total Simberi Island Measured, Indicated and Inferred Resources to 4.7 Moz gold and 10Moz silver, comprising oxide gold resources of 1.4 Moz and sulphide gold resources of 3.3Moz.
Extension to Ore Reserve of 437,000 contained ounces.
Remaining mine life extended to over 10 years.
Scoping studies to assess expanding the Oxide processing capacity to 3.0M tonnes per annum.
Pre-feasibility study commenced for Sulphide Expansion project to potentially add a further 100,000ozpa by around December 2011.
Barrick Gold commenced AUD$20 million work program for Tabar Island exploration joint venture.
Balance sheet strengthened with in excess of AUD$20.0M cash at bank.
Executive Chairman Mark Caruso stated "An enormous amount of hard work and effort has gone into developing the Simberi Gold Project, and it is a matter of great pride that we have successfully established such a robust, long life operation despite enormous external challenges. There is still work to be done to fully optimize the operations but I believe we are on the right track to achieve these objectives.
We believe the Simberi Gold Project, with its world-class resource base and highly prospective exploration tenements, provides Allied Gold with an outstanding platform to deliver terrific growth and value for our shareholders."
With commissioning and ramp-up of the initial Oxide operation effectively complete, and ongoing exploration success, Allied continues to assess the viability of an expansion to its existing oxide plant. Significant potential productivity benefits are possible with a rescaling of the plant and these are currently being scoped.
Allied is rapidly advancing pre-feasibility studies to exploit Simberi's extensive sulphide gold resources. The Sulphide Expansion Project is intended to increase the Simberi total annual production to approximately 200,000 oz by around December 2011.
Allied is also confident of continuing to rapidly grow its gold inventory in the Simberi region. Allied's exploration licences cover the entire Tabar Island Group in north-eastern Papua New Guinea, which shares the same geological setting as the world-class Lihir Island gold mine.
Allied's pre-eminent landholding and established production base in this rich and highly productive gold province leaves the company uniquely placed to participate in global industry consolidation. The Company is assessing growth opportunities both organic expansion and via potential merger and acquisitions to add substantial value for shareholders.
The potential of Allied's Tabar Islands holdings has been recognized by international mining giant Barrick Gold, which may earn up to a 70% interest in Allied's Tabar Islands licenses (excluding the Simberi Island mining lease) by funding up to AUD$20 million of exploration over 8 years.
Executive Chairman Mark Caruso commented "The increasing number of mining and infrastructure projects that are currently being developed within PNG continues to reaffirm the confidence that international companies have in doing business within the region."
The full version of the ASX announcement is available from the Company's website, www.allied.com.au.
For more information:
|
Mark Caruso Executive Chairman |
T:+61 7 93252 5911 |
|
Roland Cornish Beaumont Cornish Limited |
T: +44 (0) 20 7628 3396 |
Competent Persons
The information in this Stock Exchange Announcement that relates to project financial modelling, mining, exploration and metallurgical results, together with any related assessments and interpretations, has been approved for release by Mr. R. Hastings, MSc, BSc. M.Aus.I.M.M., a qualified geologist and full-time employee of the Company. 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 ASX release in the form and context in which it appears
The information in this Stock Exchange Announcement that relates to Ore Reserves has been compiled by Mr J Battista of Golder Associates who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Battista has had sufficient experience in Ore Reserve estimation relevant to the style of mineralisation and type of deposit under consideration 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 Battista consents to the inclusion of the information contained in this ASX release in the form and context in which it appears.
Forward-Looking Statements
This press release contains forward-looking statements concerning the projects owned by Allied Gold. Statements concerning mineral reserves and resources may also be deemed to be forward-looking statements in that they involve estimates, based on certain assumptions, of the mineralisation that will be found if and when a deposit is developed and mined. Forward-looking statements are not statements of historical fact, and actual events or results may differ materially from those described in the forward-looking statements, as the result of a variety of risks, uncertainties and other factors, involved in the mining industry generally and the particular properties in which Allied has an interest, such as fluctuation in gold prices; uncertainties involved in interpreting drilling results and other tests; the uncertainty of financial projections and cost estimates; the possibility of cost overruns, accidents, strikes, delays and other problems in development projects, the uncertain availability of financing and uncertainties as to terms of any financings completed; uncertainties relating to environmental risks and government approvals, and possible political instability or changes in government policy in jurisdictions in which properties are located.
Forward-looking statements are based on management's beliefs, opinions and estimates as of the date they are made, and no obligation is assumed to update forward-looking statements if these beliefs, opinions or estimates should change or to reflect other future developments.
Not an offer of securities or solicitation of a proxy
This communication is not a solicitation of a proxy from any security holder of Allied Gold, nor is this communication an offer to purchase or a solicitation to sell securities. Any offer will be made only through an information circular or proxy statement or similar document. Investors and security holders are strongly advised to read such document regarding the proposed business combination referred to in this communication, if and when such document is filed and becomes available, because it will contain important information. Any such document would be filed by Allied Gold with the Australian Securities and Investments Commission, the Australian Stock Exchange and with the U.S. Securities and Exchange Commission (SEC).
The technical information in the Announcement was prepared under the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (JORC).
Glossary of terms used in the Announcement:
19. 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.
20. 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.
21. 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.
22. 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
Others
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
Simberi 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.
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.
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