TIDMAGLD
RNS Number : 7879F
Allied Gold Limited
03 May 2011
FOR IMMEDIATE RELEASE 3 May 2011
allied gold limited
("the Company")
ASX Quarterly Report for the quarter ended 31 MARCH 2011
Allied Gold lodged its Quarterly Report along with an
accompanying presentation with the ASX yesterday for the period
ended 30 April 2011. Extracts are as follows:
HIGHLIGHTS - THREE MONTHS ENDED MARCH 31, 2011
-- Simberi (PNG)
- Production for quarter of 10,867 ounces with four weeks of
lost gold production due to repairs to tailings mixing tank during
March. Production recommenced in April and mill throughput again
exceeding nameplate capacity.
- The run of mine (ROM) stock pile was built to 90,000 tonnes
with 75,000 tonnes at Pigiput and 15,000 tonnes at the Sorowar pit.
Additionally a significant amount of waste was pre-stripped in all
pits.
- Work continued to progress on the 3.5Mtpa oxide plant
expansion focusing on civil site activities, geotechnical
investigations and design of foundations for grinding &
classification, leach, and tails thickening areas.
-- Gold Ridge (Solomon Islands)
- On March 9 2011, the Company announced the pouring of the
first gold from the Gold Ridge gold mine under Allied Gold
ownership. Production for the month of March was 1,563 ounces.
- Recovery for the month of March was below expectations at 67%
and it is anticipated to increase to LOM average of 82% as
production rates increases.
- Redevelopment of the Gold Ridge Mine was completed in March
with commissioning scheduled to be completed approximately in June
2011.
- The mill throughput was progressively increased with rates
achieved of 85% to 90% of the planned 310 tonnes per hour
production rate.
- Ore on the ROM pad, predominantly from the Valehaichichi pit,
stood at approximately 200,000 tonnes with the mine fleet
increasing productivity towards 14,000 tonnes per day of ore and
waste.
- Village relocation continuing with total 95 new homes handed
over and a total of 329 people resettled from mining area.
-- Exploration
- At Gold Ridge the March quarter was used to prepare for the
core drilling programme due to commence in April.
- Resource definition drilling led to a 271,000 ounce increase
in Inferred Mineral Resources at the Botlu deposit at the Simberi
Gold mine.
-- Corporate
- Cash at bank as at March 31 was $16.3 million.
- On April 6 2011 the Company announced the completion of a
$93.8 million placement of ordinary shares to institutional and
sophisticated investors.
- During the Quarter, the Group achieved a profit after tax of
$1.5 million. The profit after tax for the nine month period ended
March 31, 2011 was $10.9 million.
- The Company has interest bearing loans of $54 million with a
US$35 million facility from International Finance Corporation and
$15 million finance lease facility from Bank of South Pacific.
- The Company is progressing plans to migrate its current
listing on the London AIM market to a Premium Listing on the London
Stock Exchange (LSE) Main Market by June 30 2011.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This management's discussion and analysis ("MD&A") of Allied
Gold Limited ("Allied Gold" or the "Company") is dated April 29 ,
2011 and provides an analysis of the Company's performance and
financial condition for the three months ended March 31, 2011 (the
"Quarter"). This MD&A should be read in conjunction with the
Company's interim consolidated financial report for the three and
nine months ended March 31, 2011 and the notes thereto. These
documents, along with others published by the Company are available
under the Company's profile on the Canadian System for Electronic
Document Analysis and Retrieval ("SEDAR") at www.sedar.com.
The consolidated financial statements of Allied Gold and the
financial information contained in this MD&A were prepared in
accordance with Australian equivalents to International Financial
Reporting Standards as defined by the Australian Accounting
Standards Board ("Australian IFRS") and are fully compliant with
International Financial Reporting Standards as issued by the
International Accounting Standards Board. All amounts in this
MD&A are expressed in Australian dollars unless otherwise
identified, and references to "$" are to Australian dollars.
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". 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.
Overview
Allied Gold is a gold producer, developer and exploration
Company whose shares are listed on the Toronto Stock Exchange
("TSX") under the symbol "ALG", on the Australian Securities
Exchange ("ASX") under the symbol "ALD" and on AIM, a market
operated by the London Stock Exchange plc under the symbol "AGLD".
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 Australian
Solomons Gold Limited ("ASG"), the owner of 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 km(2) 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 EL 609 is due for renewal in May 2011 and
the Company is currently in the process of renewing this license.
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 technical report (the
"Technical Report") entitled "Simberi Gold Project, Simberi Island,
Papua New Guinea" dated September 25, 2009 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 Technical Report has been filed with certain Canadian
securities regulatory authorities pursuant to NI 43-101 and is
available for review under Allied Gold's SEDAR profile at
www.sedar.com.
The Gold Ridge Project
In November 2009, the Company acquired control of Australian
Solomons Gold Limited ("ASG").
ASG is an Australian-based mineral resource exploration company
that was incorporated under the Australian Corporations Act on
September 10, 2004. ASG converted its Australian legal status to a
"public" company on April 4, 2006, which was confirmed by the
Australian Securities and Investment Commission on September 6,
2006. The general development of the business of ASG has focused
entirely on the Gold Ridge project on the island of Guadalcanal in
the Solomon Islands (the "Gold Ridge Project").
The Gold Ridge Project consists of a mining lease that covers an
area of 30 km2 and a prospecting license in the area surrounding
the mining lease that covers an area of 130 km(2) . The mining
lease is administered under a mining agreement between ASG and the
Solomon Islands Government. ASG holds the Gold Ridge Project
through certain wholly-owned Australian and Solomon Islands
subsidiaries.
Prior to ASG acquiring the Gold Ridge Project, previous owners
of the Gold Ridge Project had constructed a 2Mtpa open cut mine
starting in 1997 and mined the Valehaichichi deposit commencing in
August 1998. The Gold Ridge Project was eventually shut down in
September 2000 by a subsequent owner 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.
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 has considerable
infrastructure remaining from the previous operations, although
major refurbishment is required to most of the plant and equipment
at site. Mine site infrastructure includes workshops and warehouse,
water supply, power generators and building, road access, tailings
storage facility, and an on-site camp for 150 people which have
recently been refurbished.
The Gold Ridge Project is the subject of (the "Technical
Report") entitled "Estimation of Recoverable Gold Resources Gold
Ridge Project" dated November 27, 2008 prepared for Australian
Solomons Gold Limited by W J A Yeo, MAusIMM PhD of Hellman &
Schofield Pty Ltd who is an independent qualified person as defined
in National Instrument 43-101 - Standards of Disclosure for Mineral
Projects ("NI 43-101"). The Technical Report has been filed with
certain Canadian securities regulatory authorities pursuant to NI
43-101 and is available for review under Australian Solomons Gold's
SEDAR profile at www.sedar.com.
In March 2010, Allied Gold formally commenced a $150 million
project to redevelop the Gold Ridge project. Information regarding
the current status of the project is provided in the section of
this MD&A headed "Projects - Gold Ridge".
SIMBERI, PNG
Production - Production for quarter of 10,867 ounces with four
weeks of lost gold production due to repairs to tailings mixing
tank during March. Production recommenced in April and mill
throughput again exceeding nameplate capacity. Production for the
Nine months to March 2011 was 47,994 ounces.
Repairs to tailings mixing tank - In early March, processing at
Simberi was suspended following the detection of a leak of diluted
tailings materials due to damage to a valve and some onshore piping
to the tailings mixing tank. Contrary to media reports the leak,
which was in the form of diluted tailings material, occurred after
processing through the mixing tank. On April 7 2011, Allied, with
the full support of Landowners and its national employees,
successfully petitioned the PNG National Court of Justice to return
to work.
During the period in which processing operations were suspended,
the Company took the opportunity to advance a number of planned
plant maintenance activities and mining operations were continued.
The run of mine (ROM) stock pile was built to 90,000 tonnes with
75,000 tonnes at Pigiput and 15,000 tonnes at the Sorowar pit.
Additionally a significant amount of waste was pre-stripped in all
pits.
Mill Throughput - Notwithstanding the shutdown noted above for
the maintenance repairs, the Simberi processing plant continued to
perform above its nameplate capacity of 2 million tonnes per annum
(Mpta) and the process recovery remained consistent at 89% to
91%.
Oxide Plant Expansion - Work continued to progress on the
3.5Mtpa oxide plant expansion focusing on civil site activities,
geotechnical investigations and design of foundations for grinding
& classification, leach, and tails thickening areas. Specific
activities undertaken included:
- Foundation engineering design for SAG mill, leach tanks and
tails thickener.
- Commencement of the excavation of leach tank foundations.
- Completion of the lime slaker civil works.
- Procurement of the tails thickener and SAG SER unit.
- Tenders for screens, pumps and reclaimers were issued.
- Preliminary engineering for a new dump pocket at Sorowar was
commenced. This new design will be more user friendly and more cost
efficient to operate.
During April, some key members of the project construction team
from the successful redevelopment of the Gold Ridge project will
move to Simberi to manage the Oxide plant expansion project.
Sulphide Bankable Feasibility Study - The scope of work and $8
million budget for advancing the Simberi sulphide development to
Bankable Feasibility Study (BFS) has been agreed. The aim is to
deliver the BFS in early 2012 with the critical work to be
completed incorporating (i) further sulphide resource and reserve
definition and metallurgical drilling and (ii) roaster pilot plant
test work. The BFS will be optimised in 2012 in parallel with
obtaining government permits to build and operate a sulphide
process plant and mine. The BFS will deliver an economic study on a
2.5Mtpa flotation and roaster circuit, integrated with the current
expanded oxide and mining processing expansion project.
Specific developments in relation to the BFS during the March
quarter included:
- Resource confirmation and extensional and definition drilling
for sulphide resources continued with a total of 3,741m of drilling
completed consisting of 8 diamond cored holes for 1,397m at Botlu,
and 5 diamond cored holes for 1,144m at Sorowar.
- Preparations were made to present to the PNG Government the
results of the PFS which was completed in 2010 and to hold
discussions with regulators on components of the BFS including
waste and tails management, and roaster operations.
- Metallurgical samples were assembled for the next stage of
testing to be conducted in the next quarter.
GOLD RIDGE, SOLOMON ISLANDS
First gold pour - On 9 March 2011, the Company announced the
pouring of the first gold from the Gold Ridge gold mine under
Allied Gold ownership. Production for the month of March was 1,563
ounces.
Construction - Redevelopment of the Gold Ridge Mine was
completed in March with commissioning scheduled to be completed
approximately in June 2011. The plant will undergo ramp up in the
next few months to achieve full production capacity of 2.5Mtpa.
Plant performance testing will be carried out in May. The remaining
scopes of work include the heavy vehicle mobile workshop, the mine
change house, and the village resettlement housing and community
buildings. These tasks will completed over the next two
quarters.
Recovery- Recovery for the month of March was below expectations
at 67% and it is anticipated to increase to LOM average of 82% as
production rates increases.
Mill throughput - The mill throughput was progressively
increased with rates achieved of 85% to 90% of the planned 310
tonnes per hour production rate.
Mining - Ore on the ROM pad, predominantly from the
Valehaichichi pit, stood at approximately 200,000 tonnes with the
mine fleet increasing productivity towards 14,000 tonnes per day of
ore and waste. In the Namachamata pit some pockets of ore have been
taken and the main pit area is scheduled to be accessed in May.
Resettlement - 95 resettlement houses have been completed a
total 329 people have been relocated from the mine area.
CORPORATE
Cash - Cash at bank as at March 31 was $16.3 million. Subsequent
to the quarter end, the Company announced that it had completed of
a $93.8 million placement to institutional and sophisticated
investors. The proceeds will be used to retire debt, improve
Simberi (PNG) operational efficiency and expand Simberi production
and working capital.
Borrowings-The Company has interest bearing loans of $54 million
with a US$35 million facility from International Finance
Corporation and $15 million finance lease facility from Bank of
South Pacific.
Hedging -The Company is hedge-free following the unwinding of
its hedge position in early 2010 and achieved an average gold price
of US$1,366/oz in the March quarter on sales of 16,034 ounces.
UK main market listing- The Company continued to assess the
benefits of migrating its current listing on the London AIM market
to a Premium Listing on the London Stock Exchange's (LSE) Main
Market in 2011. In April 2011 the Company confirmed its intention
to enter into a Scheme of Arrangement under which Allied Gold
Mining Plc, a new company incorporated in England and Wales, will
become the holding company of Allied Gold and its controlled
entities. Allied Gold Mining Plc will then apply for a Premium
Listing of the LSE's Main Market.
Profit after tax - During the Quarter, the Group achieved a
profit after tax of $1.5 million. The profit after tax for the nine
month period ended March 31, 2011 was $10.9 million.
EXPLORATION
Simberi, PNG
At Simberi, exploration focused on resource confirmation and
extension drilling for the Simberi Sulphide Bankable Feasibility
Study due to be presented in 2012. A total 1,731 metres were
drilled, with 5 core (1,016 metres) and 9 RC (75 metres) holes
drilled.
Sample assays were received for thirteen core holes; collar
details and down hole intercepts are presented in Table 1, Table 2,
Table 3 and Table 4). Results for 3 core holes and the 9 RC holes
drilled are awaited.
Better down-hole intercepts were found at Botlu, including:
-- 33m @ 2.15g/t Au from 119m in Sulphide (SDH163)
-- 41m @ 3.46g/t Au from 14m in Oxide, Transition and Sulphide
(SDH167)
An updated Mineral Resource, including these drill hole
intercepts, increased the estimated Inferred Resource at Botlu to
8.4 Mt at a grade of 1.59 g/t Au for 429,000 ounces gold, as at
February 2011 (ALD Media Release 10-Mar-11). This represents an
increase of 172% from previous estimate, with Measured and
Indicated Resources of 1.7 Mt @ 1.16g/t Au containing 62,000 ounces
and Inferred Resources of 1.8Mt @ 1.70g/t Au containing 96,000
ounces (ALD - Revised NI 43-101 Technical Report, 9/11/2010). The
resources are predominantly in Sulphide.
A metallurgical core drilling programme commenced, with 3 holes
(555m) completed. The programme, required to produce sufficient
Sulphide material for roasting testwork, will continue through the
June Quarter.
RC drilling, targeting largely Oxide mineralisation, is
focussing on the area west of the Botlu deposit and north of the
Pigibo deposit. In both areas, assays of surface samples have
exceeded 1g/t Au.
Table 1 Botlu, Simberi - Collar Details
TIG TIG Dip Total Core
Hole North East RL / Length Loss
Deposit Hole ID Type (m) (m) (m) Azi (m) (m)
--------- -------- ------ --------- -------- ------ ---- ------- -----
-75
/
Botlu SDH162 Core 208377.8 43403.4 207.9 178 151.1 1.5
--------- -------- ------ --------- -------- ------ ---- ------- -----
-80
/
Botlu SDH163 Core 208344.7 43530.8 203.0 235 172.1 0.1
--------- -------- ------ --------- -------- ------ ---- ------- -----
-70
/
Botlu SDH164 Core 208323.5 43558.2 192.9 180 191.0 0.0
--------- -------- ------ --------- -------- ------ ---- ------- -----
-60
/
Botlu SDH165 Core 208306.7 43599.7 186.9 180 191.0 0.0
--------- -------- ------ --------- -------- ------ ---- ------- -----
-76
/
Botlu SDH166 Core 208226.4 43651.0 187.9 178 157.0 1.1
--------- -------- ------ --------- -------- ------ ---- ------- -----
-70
/
Botlu SDH167 Core 208381.2 43350.2 193.3 180 172.0 0.8
--------- -------- ------ --------- -------- ------ ---- ------- -----
-70
/
Botlu SDH175 Core 208450.8 43302.2 177.6 180 185.2 0.3
--------- -------- ------ --------- -------- ------ ---- ------- -----
-70
/
Botlu SDH176 Core 208395.3 43428.8 215.2 180 177.5 4.5
--------- -------- ------ --------- -------- ------ ---- ------- -----
Table 2 Botu, Simberi - Down hole intercepts, 0.5 g/t assay
cut-off (intercept definition method described below Table 4)
Au
From To Intercept Grade Ag Grade
Hole ID (m) (m) (m) (g/t) (g/t) Oxidation
--------- ------ ------ ------ ---------- -------- --------- ----------
SDH162 0.0 151.1 0.45 ALS+EXLAB
----------------- ------ ------ ---------- -------- --------- ----------
44.0 54.0 10.0 1.58 SU
incl 45.0 47.0 2.0 3.46 SU
loss 0.3m 82.0 115.0 33.0 1.22 SU
loss
0.3m incl 95.0 114.0 19.0 1.47 SU
--------- ------ ------ ------ ---------- -------- --------- ----------
SDH163 0.0 172.1 1.43 ALS+EXLAB
----------------- ------ ------ ---------- -------- --------- ----------
53.0 68.0 15.0 9.15 SU
incl 53.0 56.0 3.0 10.8 SU
incl 53.0 54.0 1.0 17.7 SU
and 64.0 66.0 2.0 44.9 SU
incl 64.0 65.0 1.0 84.6 SU
119.0 152.0 33.0 2.15 SU
incl 119.0 128.0 9.0 4.38 SU
incl 120.0 122.0 2.0 5.45 SU
and 126.0 127.0 1.0 11.70 SU
155.0 165.0 10.0 0.79 SU
---------------- ------ ------ ---------- -------- --------- ----------
SDH164 0.0 191.0 0.24 ALS+EXLAB
----------------- ------ ------ ---------- -------- --------- ----------
30.0 36.0 6.0 1.34 SU
42.0 48.0 6.0 0.99 SU
---------------- ------ ------ ---------- -------- --------- ----------
SDH165 0.0 191.0 0.18 ALS+EXLAB
----------------- ------ ------ ---------- -------- --------- ----------
9.0 16.0 7.0 1.21 SU
---------------- ------ ------ ---------- -------- --------- ----------
SDH166 0.0 157.0 0.25 ALS+EXLAB
----------------- ------ ------ ---------- -------- --------- ----------
32.0 48.0 16.0 1.2 SU
incl 42.0 47.0 5.0 1.97 SU
---------------- ------ ------ ---------- -------- --------- ----------
SDH167 0.0 172.0 0.92 ALS+EXLAB
----------------- ------ ------ ---------- -------- --------- ----------
OX, TR,
loss 0.1m 14.0 55.0 41.0 3.46 SU
----------------- ------ ------ ---------- -------- --------- ----------
loss OX, TR,
0.1m incl 22.0 45.0 23.0 4.69 SU
--------- ------ ------ ------ ---------- -------- --------- ----------
loss
0.1m incl 26.0 29.0 3.0 12.5 16.4 OX, TR
--------- ------ ------ ------ ---------- -------- --------- ----------
loss
0.1m incl 26.0 27.0 1.0 5.82 13.8 TR
--------- ------ ------ ------ ---------- -------- --------- ----------
and 28.0 29.0 1.0 27.2 24.5 OX
---------------- ------ ------ ---------- -------- --------- ----------
and 43.0 44.0 1.0 5.10 10.7 SU
---------------- ------ ------ ---------- -------- --------- ----------
and 49.0 53.0 4.0 4.11 SU
---------------- ------ ------ ---------- -------- --------- ----------
and 50.0 51.0 1.0 5.96 SU
---------------- ------ ------ ---------- -------- --------- ----------
SDH175 0.0 185.2 0.48 ALS_TSV
----------------- ------ ------ ---------- -------- --------- ----------
0.0 27.0 27.0 1.27 OX
---------------- ------ ------ ---------- -------- --------- ----------
115.0 125.0 10.0 1.45 SU
---------------- ------ ------ ---------- -------- --------- ----------
SDH176 0.0 177.5 0.42 ALS_TSV
----------------- ------ ------ ---------- -------- --------- ----------
74.0 86.0 12.0 1.26 TR
---------------- ------ ------ ---------- -------- --------- ----------
incl 79.0 86.0 7.0 1.61 TR
---------------- ------ ------ ---------- -------- --------- ----------
89.0 97.0 8.0 2.12 TR
---------------- ------ ------ ---------- -------- --------- ----------
incl 92.0 97.0 5.0 3.01 TR
---------------- ------ ------ ---------- -------- --------- ----------
106.0 118.0 12.0 1.15 TR
---------------- ------ ------ ---------- -------- --------- ----------
Table 3 Sorowar, Simberi - Collar Details
TIG TIG Dip Total Core
Hole North East RL / Length Loss
Deposit Hole ID Type (m) (m) (m) Azi (m) (m)
--------- -------- ------ --------- -------- ------ ---- ------- -----
-55
/
Sorowar SDH170 Core 210067.6 44163.8 204.3 045 171.4 3.4
--------- -------- ------ --------- -------- ------ ---- ------- -----
-70
/
Sorowar SDH171 Core 210287.5 44547.7 187.5 045 182.9 2.6
--------- -------- ------ --------- -------- ------ ---- ------- -----
-70
/
Sorowar SDH172 Core 210233.4 44567.1 161.7 045 187.0 0.5
--------- -------- ------ --------- -------- ------ ---- ------- -----
-70
/
Sorowar SDH173 Core 210319.7 44549.1 202.1 045 159.7 0.3
--------- -------- ------ --------- -------- ------ ---- ------- -----
-65
/
Sorowar SDH174 Core 210178.5 44595.0 129.0 045 167.0 3,4
--------- -------- ------ --------- -------- ------ ---- ------- -----
Table 4 Sorowar, Simberi - Down hole intercepts, 0.5 g/t assay
cut-off (intercept definition method described below Table 4)
Au
From To Intercept Grade Ag Grade
Hole ID (m) (m) (m) (g/t) (g/t) Oxidation
--------- ------ ------ ------ ---------- -------- --------- ----------
SDH170 0.0 171.4 0.13 ALS_TSV
----------------- ------ ------ ---------- -------- --------- ----------
No significant intercepts
--------- ------ ----------------------------------------------- ----------
SDH171 0.0 182.4 0.37 ALS_TSV
----------------- ------ ------ ---------- -------- --------- ----------
66.0 74.0 8.0 1.26 OX
incl 67.0 70.0 3.0 1.94 OX
80.0 96.0 16.0 1.01 OX
incl 84.0 90.0 6.0 1.37 OX
110.0 124.0 14.0 0.84 OX, TR
---------------- ------ ------ ---------- -------- --------- ----------
SDH172 0.0 187.0 0.23 ALS_TSV
----------------- ------ ------ ---------- -------- --------- ----------
166.0 168.0 2.0 7.18 SU
incl 166.0 167.0 1.0 10.50 SU
---------------- ------ ------ ---------- -------- --------- ----------
SDH173 0.0 159.7 0.19 ALS_TSV
----------------- ------ ------ ---------- -------- --------- ----------
85.0 97.0 12.0 0.69 OX, SU
---------------- ------ ------ ---------- -------- --------- ----------
SDH174 0.0 167.0 0.16 ALS_TSV
----------------- ------ ------ ---------- -------- --------- ----------
No significant intercepts
---------------- ----------------------------------------------- ----------
NOTE: Sampling, Assaying and Down Hole Intercept Calculation
Methods applicable to Table 2 and Table 4 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 is applied
All samples were fully prepared at the company's on-site Sample
Preparation Facility on Simberi Is. 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 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.
Tatau / Tabar Islands, PNG - Core drilling is underway in the Mt
Tiro area, in south-west Tatau, with 3 holes completed during the
quarter (Table 5). No significant intercepts were found in samples
from two holes (TTD017 and TTD018) drilled at Talik the previous
quarter and one hole (TTD019) drilled at Mt Tiro. The core rig will
continue to test targets in the Mt Tiro area, including at the
nearby Seraro and Pepewo prospects.
Gridding and auger soil sampling has commenced in the Banesa
prospect area, Big Tabar Is and a complementary IP geophysical
survey is planned. Exploration is targeting extensions of the
copper-gold porphyry mineralization intersected by core drilling in
early 2009.
Table 5 Tatau Prospects - Collar Details
TIG TIG Dip Total Core
Prospect Hole North East RL / Length Loss
/ Island Hole ID Type (m) (m) (m) Azi (m) (m)
---------- ------------- ------ --------- -------- ------ ---- ------- -----
-60
Talik, /
Tatau TTD017(1) Core 191253.0 38671.0 164.0 180 202.0 7.8
---------- ------------- ------ --------- -------- ------ ---- ------- -----
-60
Talik, /
Tatau TTD018(1) Core 191253.0 38671.0 164.0 360 200.0 16.8
---------- ------------- ------ --------- -------- ------ ---- ------- -----
-60
Mt Tiro, /
Tatau TTD019(1,2) Core 188900.0 37889.0 160.0 225 202.0 27.9
---------- ------------- ------ --------- -------- ------ ---- ------- -----
-60
Mt Tiro, /
Tatau TTD020(2) Core 188846.0 37748.0 221.0 065 200.0 19.0
---------- ------------- ------ --------- -------- ------ ---- ------- -----
-60
Mt Tiro, /
Tatau TTD021(2) Core 188379.0 37221.0 292.0 041 215.0
---------- ------------- ------ --------- -------- ------ ---- ------- -----
REF: 1 = assays received during quarter; 2 = holes drilled
during quarter.
Gold Ridge, Solomon Islands
The March quarter was used to prepare for the core drilling
programme due to commence in April. Drilling will initially target
Charivunga Mineralised Zone, where drilling by previous operators
produced significant down hole intercepts. The aim of the drill
programme is to test areas, up-dip from the previous intercepts, at
sufficient density to allow a resource estimate to be made.
RESULTS OF OPERATIONS
Cash position as at March 31, 2011
Allied Gold's cash position as at March 31, 2011 was $16,303,670
in available cash and cash equivalents, compared with $36,486,444
as at December 31, 2010 and $85,525,391 as at June 30, 2010. The
decrease was primarily attributable to capital expenditure during
the quarter relating to the redevelopment of the Gold Ridge
Project.
Subsequent to the quarter end, the Company announced (6 April
2011) a completion of $93.8 million placement of new ordinary
shares to institutional and sophisticated investors. The proceeds
will be used to retire debt, improve Simberi (PNG) operational
efficiency, expand Simberi production and working capital.
Quarter ended March 31, 2011 as compared to Quarter ended March
31, 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
March 31, 3 months ended
2011 March 31, 2010
Key financial statistic $ $
------------------------------- ----------- ---------------
Sales revenue 22,007,771 14,857,132
Gross margin 5,160,665 2,499,338
Corporate expenses (3,757,726) (3,491,355)
Foreign exchange gain/(loss) 784,338 (1,827,806)
Other income/(expenses) 140,006 207,641
Financial expenses (794,484) (825,711)
----------- ---------------
Profit / (loss) for the period 1,532,799 (3,437,893)
----------- ---------------
Note: The sales revenue and gross margin presented above relate
wholly to the Group's Simberi operations as the Gold Ridge
operation was still in the construction phase as at March 31, 2011
with all expenses being capitalised.
Key financial statistics
Cashflow from operations 6,789,079 (16,840,133)
Cashflow from investing activities (22,969,969) (35,625,026)
Cashflow from financing activities (2,597,206) (1,763,858)
------------ ------------
Net cash outflows (18,778,096) (54,229,017)
------------ ------------
Key operating 3 months ended 3 months ended 12 months
statistic Unit of March 31, March 31, ended
Simberi measure 2011 2010 June 30, 2010
Waste
mined........
.............
.............
.............
.............
.............
.............
.............
... tonnes 542,832 186,611 634,296
Ore
mined........
.............
.............
.............
.............
.............
.............
.............
........ tonnes 448,681 449,904 1,981,500
Ore
processed....
.............
.............
.............
.............
.............
.............
.............
.... tonnes 368,792 439,318 1,949,650
Grade........
.............
.............
.............
.............
.............
.............
.............
............. grams of
... gold/tonne 1.03 1.22 1.18
Recovery.....
.............
.............
.............
.............
.............
.............
.............
............. % 89.3 88.6 87.9
Gold
produced.....
.............
.............
.............
.............
.............
.............
.............
... ounces 10,866 14,739 64,327
Gold
sold.........
.............
.............
.............
.............
.............
.............
.............
........ ounces 16,034 14,064 63,960
-------------- -------------- -------------- -------------- --------------
Gold Ridge
Waste
mined....................................
.........................................
......................... tonnes 604,141 --
Ore
mined....................................
.........................................
.............................. tonnes 180,568 --
Ore
processed................................
.........................................
.......................... tonnes 54,982 --
Grade....................................
.........................................
...................................... grams of gold/tonne 1.32 --
Recovery.................................
.........................................
................................... % 67.0 --
Gold
produced.................................
.........................................
......................... ounces 1,563 --
Gold ounces - --
sold.....................................
.......................................
................................
------------------------------------------ ------------------- -------
Results for the Quarter compared to the Previous Quarter
Allied Gold reported revenue of $22,007,771 and a net profit of
$1,532,799 or 0.15 cents per share for the Quarter, compared with
revenue of $14,857,132 and a net loss of $3,437,893 or (0.33) cents
per share for the prior corresponding Quarter ended March 31, 2010
(the "Previous Quarter").
The results for the Quarter (March 2011) as compared to the
Previous Quarter (March 2010) reflect the following:
-- Gold revenue for the Quarter of $22,007,771 was 48% higher
than gold revenue of $14,857,132 in the Previous Quarter for the
following reasons:
- Sales of 16,034 ounces in 2011 compared to 14,064 ounces in
2010.
- Whilst gold production from Simberi during the quarter was
lower at 10,866 ounces, compared to 14,739 ounces in March Quarter
2010, the volume of gold sold was higher in 2011.This was due to
the recovery of a gold in circuit from the prior periods during the
March Quarter and realisation n the March quarter of 1,781 ounces
of gold that were at the refinery as at December 31 2010. There was
no gold at refinery at the end of current quarter. There had been a
build up of gold in circuit due to the adverse impact on the
elution circuit of deterioration in water quality arising from
below average rainfall at the Simberi Oxide Plant.
- During March, Gold Ridge produced 1,563 ounces and is included
in the total 12,429 ounces produced by the Company during the
current quarter. Gold Ridge expenditure were all capitalised as
construction of the processing plant and associated infrastructure
is completed. Redevelopment of the Gold Ridge Mine was completed in
March with commissioning scheduled to be completed approximately in
June 2011.
- Average realised gold price of $1,373 per ounce in 2011
compared to $1,056 per ounce in 2010 (a favourable price variance
of $317 per ounce, $5.0 million total). The average realised gold
price in 2010 is net of adjustments against revenue 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 was no further hedge accounting
adjustments required for the March 2011 quarter.
-- Cost of sales of $16,847,106 for the Quarter equates to
$1,051 per ounce of gold sold compared to the Previous Quarter
costs of sales of $12,357,794 or $879 per ounce. Costs per ounce
were higher in the Quarter due to an increase in the ratio of waste
mined to total ore mined from 0.80:1 in the Previous Quarter to
2.0:1 in the current Quarter and a reduction in head grade from
1.22 in the Previous Quarter to 1.03 in the Current Quarter. The
increase in the waste ratio reflected the accelerated stripping
carried out whilst the processing operations were suspended during
the month of March 2011. It is expected that a ratio of 1:1 will be
maintained in future quarters.
-- Corporate expenses of $3,757,726 in 2011 were higher than the
corporate expenses of $3,491,355 in the Previous Quarter. During
the period corporate expenditure increased as a result of the
Company increasing its presence to carry out a number of
centralised functions (purchasing, human resources and training) to
support the two operations. The additional shared services costs
were charged back to the operations during the current period.
-- Other income for the Quarter of $140,006 was lower than
previous Quarter of $423,129. The higher amount in the previous
quarter mainly reflects higher interest earn on cash invested.
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 ($18,778,096) compared to a net decrease of
($54,229,017) in cash and cash equivalents in the Previous Quarter.
The improvement in cash flow usage in the Quarter was primarily due
to:
-- Cash generated by operating activities of $6,789,079 in the
Quarter compared to the Previous Quarter cash used by operating
activities of ($16,840,133) attributed to:
- The hedge book being terminated in February 2010. The cash out
flow in the previous Quarter includes net payments of ($18,105,877)
relating to the close out of the Group's gold hedging
commitments.
- Gold revenue in the Quarter was $7.1 million higher than in
the Previous Quarter due to increased ounces sold and a higher gold
price realised (sales of 16,034 ounces in 2011 compared to 14,064
ounces in 2010). There was no outstanding gold sales receivable at
the end of the Quarter.
-- Cash used by investing activities decreased from
($35,625,026) in the Previous Quarter to ($22,969,969) in the
Quarter due to the Gold Ridge mine construction project nearing
completion. There was significant investment expenditure during the
Quarter primarily in relation to the Gold Ridge redevelopment and
the ongoing Simberi Sulphide Feasibility project. The Previous
Quarter included $16.4 million expenditure on the Gold Ridge
Development Project and $5.4 million upgrading the Simberi mobile
fleet.
-- Cash used by financing activities increased from an outflow
of ($1,763,858) in the Previous Quarter to an outflow of
($2,412,415) during the current the Quarter. The current Quarter
payments relate predominately to finance leases for capital
equipment on Simberi and reflect the drawdown made under the Bank
of South Pacific facility in December 2010.
Nine months ended March 31, 2011 as compared to nine months
ended March 31, 2010
The tables below summarise the key financial and operating
statistics for Allied Gold's mining and processing activities for
the nine months ended March 31, 2011 (Nine Months), the nine months
ended March 31, 2010 (Previous Nine Months) and the year ended June
30, 2010:
Nine months Nine months
ended ended Year ended
March 31, 2011 March 31, 2010 June 30, 2010
Key financial statistic $ $ $
Sales revenue 62,950,356 47,998,303 67,555,369
Gross margin 13,528,381 (2,510,310) (2,734,171)
Corporate expenses (8,708,279) (11,823,218) (14,773,680)
Share based remuneration 1,252,500 (6,819,755) (6,828,559)
Foreign exchange gain/(loss) 1,228,401 (2,621,973) (987,640)
Other expenses /(income) 4,916,728 586,593 39,573,707
Financial expenses (1,295,940) (2,664,909) (5,996,122)
Profit/(loss) for the period 10,921,791 (25,853,572) 10,228,815
--------------- --------------- --------------
Cashflow from operations 14,645,613 (25,774,024) (20,509,398)
Cashflow from investing
activities (126,288,818) (42,217,862) (63,800,604)
Cashflow from financing
activities 43,839,996 149,295,320 148,677,057
--------------- --------------- --------------
Net cashflow (67,803,209) 81,303,434 64,367,055
--------------- --------------- --------------
Nine months Nine months
Key operating Unit of ended March ended March Year ended
statistic measure 31, 2011 31, 2010 June 30, 2010
Simberi Waste
mined........
.............
.............
.............
.............
.............
.............
.............
... tonnes 1,606,056 409,726 634,296
Ore
mined........
.............
.............
.............
.............
.............
.............
.............
........ tonnes 1,698,466 1,412,393 1,981,500
Ore
processed....
.............
.............
.............
.............
.............
.............
.............
.... tonnes 1,522,296 1,411,438 1,949,650
Grade........
.............
.............
.............
.............
.............
.............
.............
............. grams of
... gold/tonne 1.09 1.17 1.18
Recovery.....
.............
.............
.............
.............
.............
.............
.............
............. % 89.7 87.3 87.9
Gold
produced.....
.............
.............
.............
.............
.............
.............
.............
... ounces 47,993 46,267 64,327
Gold
sold.........
.............
.............
.............
.............
.............
.............
.............
........ ounces 49,590 47,454 63,980
-------------- -------------- -------------- -------------- --------------
Gold Ridge
Waste
mined........
.............
.............
.............
.............
.............
.............
.............
... tonnes 604,141 - -
Ore
mined........
.............
.............
.............
.............
.............
.............
.............
........ tonnes 180,568 - -
Ore
processed....
.............
.............
.............
.............
.............
.............
.............
.... tonnes 54,982 - -
Grade........
.............
.............
.............
.............
.............
.............
.............
............. grams of
... gold/tonne 1.32 - -
Recovery.....
.............
.............
.............
.............
.............
.............
.............
............. % 67.0 - -
Gold
produced.....
.............
.............
.............
.............
.............
.............
.............
... ounces 1,563 - -
Gold ounces - - -
sold.........
.............
.............
.............
.............
.............
..
.............
.............
......
-------------- -------------- -------------- -------------- --------------
Allied Gold reported revenue of $62,950,336 and a net profit of
$10,921,791 or 1.05 cents per share for the Nine Months, compared
with revenue of $47,998,303 and a net loss of ($25,853,572) or
(2.49) cents per share for the Previous Nine Months ended March 31,
2010.
The results for the Nine Months as compared to the Previous Nine
Months reflect the following:
Higher level of production in the Nine Months due to improved
production from the Simberi operations mostly in the first two
quarters due to improved mining and processing throughput and
principally as a result of the Company's ongoing debottlenecking
and optimisation initiatives. As the processing plant was not in
operation during the month of March 2011, the Simberi operations
accelerated its waste stripping to access ore bodies and hence the
waste to ore ratio increased to 2:1 during the March quarter. It is
expected that a ratio of 1.1 will be maintained in the future
quarters. Production for the Previous Nine Months was impacted by
nine lost days of production as a result of an illegal cease work
order in December 2009. The results for the Previous Nine Months as
compared to the Nine Months also reflect a lower level of
production due to unseasonal weather conditions.
-- Gold sales of 49,590 ounces in the Nine Months were at an
average realized price (net of hedging adjustments) of $1,269/oz
compared to gold sales of 47,455 ounces in the Previous Nine Months
which were at an average realized price of $1,011/oz. The Previous
Nine month was lower due to:
- the Company delivering 17,071 ounces into the hedge book at
average price of $807 per ounce;
- 30,385 ounces sold at spot price at an average price of $1,206
per ounce; and
- non-cash adjustment against revenue arising from hedge book.
Whilst the hedge book was paid out in February 2010, for accounting
purposes the hedging looses crystallised at that time were required
to be amortised in accordance with the hedge maturity schedule. The
final maturity of the hedge book was December 31, 2010 and as such
current nine month period revenue includes this.
-- Mining and processing volumes at Simberi for the Nine Months
exceeded the volumes achieved in the Previous Nine Months, and
resulted in gold production increasing by 4% to 47,993 ounces. The
improved mining and processing throughput was principally as a
result of the Company's ongoing debottlenecking and optimisation
initiatives.
-- The total cost per ounce of gold sold (including non cash
cost) in the Nine Months was $997 per ounce compared to $1,064 in
the Previous Nine Months. The reduction in total costs per ounce is
consistent with the largely fixed nature of the costs of the
Simberi Gold Project being spread over a larger production volume
in the Nine Months.
-- During the period corporate expenditure increased as a result
of the Company increasing its presence to carry out centralised
shared services functions such as purchasing, human resources and
training to support the two operations. The additional corporate
costs were charged back to the operations only during the current
period. As a result the corporate expenses of $8,708,279 in the
Nine Months were lower than the corporate expenses of $11,823,218
in the Previous Nine Months. In addition, the Previous Quarter's
costs included approximately $1.8 million in costs incurred in
relation to the acquisition of Australian Solomons Gold as well as
legal costs incurred in relation to the legal action being taken by
Simberi against Intermet, the consulting engineers for the
construction of the Simberi plant and costs associated with the
listing of the Allied Group on the TSX.
-- In the Nine Months the cancellation of Executive compensation
options due to production based vesting conditions not being met
resulted in a write back of previously recognised share based
compensation expense in the amount of $1,252,500. In the Previous
Nine Months share based compensation expense was $6,819,755.
-- Other income includes interest income of $727,402 and a
$4,000,000 gain arising on derecognition of a financial liability
accrued in a prior reporting period that management has determined
is no longer required.
Cash and cash flows for the Nine Months compared to the Previous
Nine Months
In the Nine Months, Allied Gold reported a net decrease in cash
and cash equivalents of $67,803,209 compared to a net increase in
cash and cash equivalents of $81,303,434 in the previous Nine
Months. The cash movements during this period were primarily due
to:
-- Proceeds from equity raisings of $149,996,084 (net of capital
raising costs) in the Previous Nine Months compared to debt
financing received in the Nine Months totalling $53,772,845 from
International Finance Corporation and Bank of South Pacific.
-- Cash provided by operating activities of $14,645,613 in the
Nine Months was higher than the Previous Nine Months cash used in
operating activities of ($25,774,024) due to the higher gold price
and the Previous Nine Months including net payments of
($18,105,877) relating to the close out of the Group's gold hedging
commitments.
-- Cash used by investing activities increased from
($42,217,862) in the Previous Nine Months to ($126,288,818) in the
Nine Months due primarily to capital expenditure on property, plant
and equipment in the Nine Months in relation to the redevelopment
of the Gold Ridge Project.
Finance Activities, Liquidity and Capital Resources
Allied Gold's cash position as at March 31, 2011 consists of
$16,303,670 in available cash and cash equivalents.
During the past three years, the Company has principally funded
its activities through equity raisings. The Company raised
$159,545,451 in December 2009 and subsequent to the quarter end,
the Company announced (6 April 2011) the completion of a $93.8
million placement of new ordinary shares to institutional and
sophisticated investors. The proceeds will be used to retire debt,
improve Simberi (PNG) operational efficiency and expand Simberi
production and working capital.
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
March 31, 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 $4,409,823.
-- Commitments in relation to finance leases for the hire of
mining equipment expiring within 1 to 5 years, in the amount of
$20,025,113.
-- A required expenditure of $900,900 during the next year in
order to maintain current rights of tenure to EL 609. Financial
commitments for subsequent periods are contingent upon future
exploration results and cannot be estimated. These obligations are
subject to renegotiation upon expiry of EL 609 or when application
for a mining licence is made and have not been provided for in the
accounts.
-- Capital expenditure commitments of $11.5 million for the Gold
Ridge Project and $7.0 million for the Simberi Sulphide
pre-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
31 Mar 31 Dec 30 Sep 30 Jun 31 Mar 31 Dec 30 Sep
Consolidated 11 10 10 10 10 09 09
-------------- --------- ----------- ----------- ----------- ----------- ------------ ------------- ------------
Financial
metrics
Revenue $ 22,007,771 20,803,462 20,139,103 19,557,066 14,857,132 17,151,610 15,989,561
Income /
(loss) for
the Quarter $ 1,532,799 8,316,214 1,072,778 36,082,387 (3,437,893) (16,443,427) (7,050,301)
Income /
(loss) per
share -
basic c/share 0.15 0.80 0.10 34.68 (0.33) (2.78) (1.33)
Income /
(loss) per
share -
diluted c/share 0.14 0.79 0.10 34.68 (0.33) (2.78) (1.33)
Operational
metrics
Ore mined tonnes 629,249 655,288 566,018 552,420 449,904 495,121 467,368
Ore processed Tonnes 423,774 583,031 570,473 544,317 439,318 482,865 489,256
Gold produced ounces 12,429 18,921 18,206 18,109 14,739 17,456 14,072
Gold sold ounces 16,034 16,621 16,935 16,526 14,064 17,971 15,420
The three months ended September 30, 2009 was the first Quarter
in respect of which Allied 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 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 Gold
Ridge operation remains in the construction phase and produced
1,563 ounces for the quarter. Redevelopment of the Gold Ridge Mine
was completed in March with commissioning scheduled to be completed
approximately in June 2011.
-- The three months ended December 31, 2010 included a gain of
$4,000,000 on the extinguishment of a liability for less than its
book value and a $1,252,500 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 $36,666,786
gain on the acquisition of Australian Solomons Gold Limited. If
this gain is excluded, the loss for the three months was
$584,399.
-- 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 $6,819,755 and expenses totalling
$1,717,915 that were incurred in relation to the acquisition of
Australian Solomons Gold Limited. If these amounts are excluded the
loss for the three months was $7,905,757.
-- If the non recurring amounts and events described above are
excluded the Quarterly results demonstrate a continuing improvement
in both operational and financial metrics over the Quarters. This
improvement reflects the impact of the various efficiency and
optimization initiatives implemented to improve plant availability
and to reduce cash cost per ounce. Enhancements to plant design
have improved plant reliability and availability and have allowed
the plant to reach and maintain nameplate capacity consistently in
the June 2010, September 2010 and December 2010 Quarters.
Production at Simberi has recommenced in April 2011.
Financial and Other Instruments
In the normal course of its operations, Allied Gold 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 asset 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.
The Company may use derivative financial instruments to hedge
some of its exposure to fluctuations in gold prices and foreign
exchange rates.
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.
Pursuant to a US$25 million financing facility the Company
utilized for the construction of the Simberi Project, Allied Gold
was required by its lenders to enter into a hedging program to
provide comfort to its lenders of the cash flows going forward.
Subsequently in March 2009, Allied Gold repaid the entire project
financing facility. In February 2010 the Company settled its
remaining hedge obligations totaling 37,512 ounces of gold through
the pre delivery of gold into those hedging contracts.
For accounting purposes the "Effective Hedge" component of the
mark to market amounting to US$9.5 million was required to be
recorded in the Hedge Reserve and remained in equity at the time of
the termination of the agreement. These losses were amortised to
the income statement in accordance with the maturity profile of the
hedge book immediately prior to its termination. The "Ineffective
Hedge" component of the mark to market per the above table had been
recognised directly in the income statement progressively up to,
and including, 26 February 2010. As at March 31, 2011 the
"Ineffective Hedge" component had been fully recognised in the
income statement.
The Effective Hedge component of the mark to market was
amortised to the income statement over the following timeframe:
Hedging loss amortised to income statement
Quarter ending USD
------------------- -------------------------------------------
30 September 2010 2,738,137
31 December 2010 2,167,794
-------------------------------------------
4,905,931
-------------------------------------------
As at the date of this analysis, the Company's forecast
production is unhedged, allowing it to take advantage of increases
in 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 United States Dollar. The Company may enter into some intra
Quarter forward exchange contracts to hedge known commitments in
Papua New Guinea Kina. There were no outstanding forward exchange
contracts as at March 31, 2010.
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.
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
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 March
31, 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 MineSite
Construction Services Pty Ltd., which provides Allied Gold with
various services, including secretarial services, the supply or
procurement on behalf of Allied Gold of goods and services and the
provision of operating personnel. Amounts paid or payable to
MineSite Construction Services Pty Ltd. were $90,187 in the Quarter
and $2,209,519 in the Previous Quarter. The Previous Quarter
payments include leasing charges paid to Minesite Constructon
Services under a Dry Hire Agreement.
Director options and shareholdings
The table below provides summary movements in Directors' holding
of shares and options in the three months ended March 31, 2011.
Options
Balance
Balance at end
at start Granted as of the Vested and
of period remuneration Exercised Lapsed period exercisable
----------- ----------- ------------- ---------- ------- ----------- ------------
M Caruso 28,875,000 - - - 28,875,000 25,875,000
M House 1,500,000 - - - 1,500,000 1,000,000
A Lowrie 1,750,000 - - - 1,750,000 1,250,000
G Steemson 1,750,000 - - - 1,750,000 1,250,000
F
Terranova 15,500,000 - - - 15,500,000 14,250,000
49,375,000 - - - 49,375,000 43,625,000
----------- ------------- ---------- ------- ----------- ------------
In addition to the options shown above, the Board of Allied has
resolved to put to shareholders the issue of 1,500,000 unlisted
options to Mr Harvey at an exercise price of 50c expiring on 31
December 2011 with 1,000,000 vesting immediately and 500,000
vesting upon the share price trading at or above 70c for 5
consecutive days. The motion will be put to shareholders at the
Company's next general meeting of members.
Net Balance
Shares Balance at start Received as Options change at end
Name of period remuneration exercised other of period
--------------- ------------------- ------------- ---------- -------- -----------
M Caruso 7,685,193 - - - 7,685,193
S Harvey 200,000 - - - 200,000
M House 10,000 - - - 10,000
A Lowrie 1,635,460 - - - 1,635,460
G Steemson 1,100,000 - - - 1,100,000
F Terranova 1,000 - - - 1,000
10,631,653 - - - 10,631,653
----------- ------------- ---------- -------- -----------
Significant Accounting Policies and Estimates
All costs associated with exploration, evaluation and
development of ML 136 and EL 609 have been capitalized as these
costs are expected to be recognized through the successful
development and exploitation of the Simberi Project. The carrying
value of non-current assets is reviewed regularly to ensure the
expected net Simberi Project cash flows exceed the carrying value.
Exploration costs on all projects are capitalized provided the
conditions and tests for capitalization, contained within
Australian IFRS accounting standards, are met.
The consolidated financial statements of the Company have been
prepared in accordance with Australian IFRS. A description of
Allied Gold's significant accounting policies is included in Note 1
to the annual audited consolidated financial statements of Allied
Gold for the year ended June 30, 2010. Management is required to
make various estimates and judgments in determining the reported
amounts of assets and liabilities, revenues and expenses for each
period represented and in the disclosure of commitments and
contingencies. Management considers the following are the
accounting policies which reflect its more significant estimates
and judgments used in the preparation of the consolidated financial
statements.
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 licence costs) 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.
Foreign Currency
Foreign currency transactions are translated into Australian
dollars at exchange rates prevailing at the dates of such
transactions. Monetary assets and liabilities denominated in
foreign currencies at the balance sheet date are translated to
Australian dollars at the rate of exchange prevailing on that date.
Foreign exchange differences arising on translation are recognised
in the income statement. Non-monetary assets and liabilities that
are measured in terms of historical cost in a foreign currency are
translated using the exchange rate at the date of the transaction.
Non-monetary assets and liabilities denominated in foreign
currencies that are stated at fair value are translated to
Australian dollars at foreign exchange rates prevailing at the
dates the fair value was determined.
The assets and liabilities of foreign operations are translated
to Australian dollars at foreign exchange rates prevailing at the
balance sheet date. The revenue and expenses of foreign operations
are translated to Australian dollars at rates approximating the
foreign exchange rates ruling at the dates of the transaction.
Exchange differences arising on translation are recognised directly
in a separate component of equity.
Outstanding Securities Data
At the date of this MD&A, the Company has issued and
outstanding an aggregate of 1,198,537,554 ordinary shares and
59,950,000 options to acquire ordinary shares. No other securities
of Allied Gold are issued or outstanding. Details of movements in
Company's outstanding options during the nine months ended March
31, 2011 are as follows:
Options Options
outstanding Options outstanding
Exercise at July 1 Options expired or Options March 31
Price(iv) Maturity(v) 2010 issued cancelled exercised 2011
------------- ------------ ------------ -------- ------------- ------------ ------------
A$0.80
options 31/12/2010 1,000,000 - (1,000,000) - -
A$1 options 31/12/2010 1,000,000 - (1,000,000) - -
A$1.25
options 31/12/2010 1,000,000 - (1,000,000) - -
A$1.50
options 31/12/2010 1,000,000 - (1,000,000) - -
A$2 options 31/12/2010 1,000,000 - (1,000,000) - -
A$0.35
options(i) 31/10/2011 30,012,500 - (2,362,500) (375,000) 27,275,000
A$0.31
options 31/12/2010 1,699,427 - - (1,699,427) -
A$0.35
options(ii) 31/12/2011 1,500,000 - - - 1,500,000
A$0.50
options 31/12/2013 37,500,000 - (7,500,000) - 30,000,000
A$0.50
options 31/12/2013 1,175,000 - - - 1,175,000
------------ -------- ------------- ------------ ------------
76,886,927 - (14,862,500) (2,074,427) 59,950,000
------------ -------- ------------- ------------ ------------
Notes:
(i) Of the 27,275,000 options expiring 31 October 2011,
8,325,000 vest upon the share price trading at A$0.70 or above for
five consecutive days.
(ii) Of the 1,500,000 options expiring 31 December 2011, 500,000
vest upon the share price trading at A$0.70 or above for five
consecutive days.
(iii) The weighted average exercise price of all options
outstanding at the end of the period was A$0.43.
(iv) The weighted average time to expiry of all options
outstanding at the end of the period was 1.75 years.
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.
In addition to the options shown above, the Board of Allied has
resolved to put to shareholders the issue of 1,500,000 unlisted
options to Mr Harvey at an exercise price of 50c expiring on 31
December 2011 with 1,000,000 vesting immediately and 500,000
vesting upon the share price trading at or above 70c for 5
consecutive days. The motion will be put to shareholders at the
Company's next general meeting of members.
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.
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.
A copy of the presentation can be viewed as a link to this
announcement and on the company's website
www.alliedgold.com.au.
http://www.rns-pdf.londonstockexchange.com/rns/7879F_-2011-5-3.pdf
For further information, contact:
Simon Jemison Investor Relations & Media + 61 0418 853
922
Rebecca Greco Investor Relations, North America +1 416 839
8610
David Simonson c/. Merlin PR +44 20 7726 8400
Beaumont Cornish Limited
Roland Cornish
Beaumont Cornish Limited
T: +44 (0) 20 7628 3396
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 <0.01 g/t. Au assays are determined by a
50gm fire assay and an AAS (Atomic Adsorption Spectrometry) finish.
Any interval recorded as being below detection has been recorded in
the database as having a grade of half the detection limit, which
in this case is 0.005 g/t. The Ag detection limit is 0.2g/t, and is
derived from a 0.5g charge Aquaregia digest, with assay via ICP
(Induced Coupled Plasma) AES.
Mineralisation types are:
o Oxide - extremely weathered material (cyanide leach recoveries
> 90%), 0.5 g/t Au cutoff
o Transitional - distinctly weathered material (cyanide leach
recoveries 50-90%), 0.5 g/t Au cutoff
o Sulphide - Slightly weathered to fresh material (cyanide leach
recoveries generally <50%), 0.5 or 1.0 g/t Au cutoff
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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCGIGDUDSGBGBX
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