2nd Mar 2006 12:05
GMA Resources PLC02 March 2006 GMA Resources Plc ("GMA" or "The Company") 2 March 2006 Trading Update New Production Plan Gold production expected to reach over 100,000 ounces/year by January 2007 usingheap leach technology combined with existing CIL enhancements. Construction finance in place Both Joint Venture partners have approved their respective share of financingfor the Development project to proceed. Algerian partners consolidated 48% minority shareholder position in operating company acquired by the Stateowned oil and gas company Sonatrach (GMA holds 52%) New Management Team Les Melrose Project Manager AmessmessaEdgar Mercier Maintenance ManagerYves Buro Chief GeologistCarolina Samuel Executive Assistant - London Extensive Exploration planned AeroMag survey planned for concession in Q2 2006Regional stream sediment program planned in 2006 Gold production by ENOR Spa is now expected to reach a rate of over 100,000ounces per year by January 2007 with the development of the Amesmessa GoldProject from a mineable resource estimated at 543,000 ounces. Economicevaluation of the project indicates the most favourable development scenario isa combined carbon-in-leach (CIL) process plant and heap leach operation. Thiswould be accomplished by selectively mining gold bearing veins to supply highgrade ore to the CIL plant, and supply all remaining low grade gold bearingzones averaging 4.5 g/t Au for a heap leach operation located at Amesmessa. Aninvestment in a replacement Ball Mill in the Tirek CIL plant would increase itsthroughput by at least 50% and would be complemented with a new heap leachoperation at Amesmessa. A summary of the proposed Amesmessa gold project with heap leach and theupgrades to Tirek is shown in the following table : Parameter Base Case ValuesGold Price $500/ozCapital Cost $36 200 000 Project Net Present Value (NPV) $41 400 000 (Discount Rate 10%)IRR 57%Cash Cost $/oz $218Total Cost $/oz $337Initial Au Production Date January 2007Mining Cost Used (life-of-mine) $1.63/tOunces Delivered from Mine 543,000Average Grade Processed (g/t Au) 6.3Duration of Production 4.5 years The initial Au production date for Amessmessa heap leach is January 2007 howeverTirek will continue to operate and increase production as soon as the new ballmill is installed. A sensitivity analysis was conducted on four variables ; gold price, heap leachrecovery, operating cost, and capital cost evaluating project NPV and IRR. Thefour variables were adjusted favourably and unfavourably in increments of 5% to-25% and +20%. The range in NPV was from a low of $3.8 million to a high of$71.5 million, and a range of IRR from 14.5% to a high of 89.8%. The project wasmost sensitive to gold price which at $375/oz showed the lowest NPV and IRRvalues. The project was least sensitive to capital cost and heap leach recoveryand modestly sensitive to operating cost variations. The base case analysis for the sensitivity analysis is $500/oz gold price, $36.2million capital cost, $25 million per annum operating cost, and 72% goldrecovery for the heap leach and 96% recovery for the CIL. The strategy of processing lower grade ores with heap leach and high grade orewith the Tirek CIL plant is sound with a very low risk of project failure. Aheap leach recovery of only 54% delivered a project NPV of $21.1 million and IRRof 35%. Further additions to management team Manager of Geology- Yves Buro Yves is a Swiss/Canadian national with a BSc andMSc in geology and a Member of the Order of Engineers of Quebec. Yves isconsidered a "qualified person" under Canadian 43-101 who will bring thisexpertise "in-house" for GMA and ENOR. His CV covers most of the world, withextensive experience in North and sub Saharan Africa over the past 30 years. Les Melrose has been hired as Amessmessa Project Manager. Les is an Australianminer who has spent the last two years in DRC as Mine Manager for a couple ofopen pit operations and prior to that spent 5 years as Project Superintendentfor the Mining Contractor at Gold Fields Tarkwa project in Ghana where Lesmanaged a staff of 250 employees. Prior to that Les worked on a variety ofprojects in PNG and Australia. Edgar Mercier has been hired as Maintenance Manager for ENOR. Edgar graduatedfrom St Jean Military College in Quebec and began his career with the CanadianAir Force. During his career he worked for a number of large scale mines inCanada and Africa including Raglan and Iron Ore Company in Canada and Compagniedes Bauxites de Guinee in Guinea where he was Superintendent of MobileEquipment. Most recently Edgar spent 10 years with Falconbridge at Raglan inNorthern Quebec where he was Chief of Maintenance Planning. Edgar will bringextensive teaching experience in maintenance planning to ENOR. Current Operations Gold sales in January were 1,672 Oz @ 601.44 USD from Tirek. There was a 5 daymill shut down for maintenance. Sales for 2005 were 18,775 ounces of gold at anaverage price of USD$502. The February sale has not been completed as yet. London Office GMA has opened an office in London at 5 Charterhouse Square, London EC1M 6PXtel: +44 (0) 20 72 53 7670 For more information:Douglas Perkins CEOGMA ResourcesTel: +44 (0) 20 72 53 7670Philip Secrett/Fiona OwenGrant Thornton Corporate FinanceTel: +44 (0) 207 383 5100 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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