ASX Announcement Dated 19/03/07
HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2006
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DIRECTORS’ REPORT
Your directors submit the financial report on the consolidated entity consisting of Allied Gold Limited and the entities it controlled at the end of, or during, the half year ended 31 December 2006.
DIRECTORS
The Directors of the Company in office during or since the end of the half year are:
Mr Mark V Caruso
Mr Jeffrey J Moore
Mr Gregory H Steemson
Mr John G Brock (appointed 25 January 2007)
Mr Anthony Lowrie (appointed 9 March 2007)
Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.
RESULTS
The consolidated loss of the economic entity after providing for income tax is $467,554 (2005: loss $978,517).
REVIEW OF OPERATIONS
During the period under review there were major advances in the development of the Simberi Oxide Gold Project. A detailed project review was completed which confirmed the capital cost of the project at $80M for a plant capacity of 2.0Mtpa. Gold production is scheduled to commence in the second half of 2007.
Construction of the Project commenced in July 2006 and by the end of December 2006 much of the accommodation and infrastructure work had been completed. Plant construction including site earthworks, foundations for the leach tanks, plant buildings and the scrubber area had commenced and was approximately 20% complete by the end of December 2006. Expenditure and commitments to the end of December 2006 totaled $44.6M.
Construction of accommodation blocks progressed well with 4 construction and 3 operations blocks completed with the remainder expected to be completed by the end of the third quarter. The messing facilities and construction power supply have been completed and are being operated by the catering contractor.
Construction of the all weather roads from the processing plant site to the mining areas, aerial ropeway loading point and support towers was completed with a very high standard of road being constructed which will enable ore to be hauled to the process plant to supplement the aerial ropeway if necessary.
The upgrade of the airstrip on Simberi Island to accommodate Dash 8 aircraft was completed along with the upgrade of the island ring road which enabled the employment of Simberi Island inhabitants on the construction project. Wharf construction had commenced with pile driving completed and deck construction underway. Negotiations with a power provider are progressing well and are expected to be completed in the short term. The bathymetric survey of the ocean floor adjacent to Pigiput Bay was completed enabling the completion of the deep sea tailings placement (DSTP) design.
Exploration on Simberi and Tatau continued with positive results being achieved. Ore resources were increased by 43,000 ounces to 2.39 million ounces of gold.
SUBSEQUENT EVENTS
The following events occurred subsequent to 31 December 2006:
- Mr John Grant Brock was appointed to the Board of Allied Gold Limited on 25 January 2007.
- Mr Anthony Lowrie was appointed to the Board of Allied Gold Limited on 9 March 2007.
- 2,000,000 options were issued to certain employees of Allied Gold Limited pursuant to the Allied Gold Limited Employee Option Plan as follows:
- 1,250,000 options exercisable at $0.50 on or before 31 December 2008
- 750,000 options exercisable at $0.80 on or before 31 December 2008.
- 8,333 ordinary shares in the Company were issued through the exercise of options.
- Allied Gold Limited completed a Tenement Sale Agreement with Carbine Resources Limited for the sale of the Red Dam Project. The consideration for the sale being a deposit of $5,000 cash plus 4,020,000 shares in Carbine Resources Limited.
FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES
The company is continuing with the full development of the Simberi Oxide Gold Project with a 2.0 mtpa plant currently being constructed with the associated infrastructure underway. Mine production is scheduled at 84,000 ounces of gold per annum. Scheduled gold production is due to commence in the third calendar quarter 2007. It is anticipated that an accelerated exploration programme will be undertaken to convert known resource ounces into reserve ounces.
In the opinion of the Directors it may prejudice the interests of the Company to provide additional information in relation to likely developments in the operations of the Company and the expected results of those operations in subsequent financial periods.
OTHER INFORMATION
The registered office and principal place of business is Unit 15, 51-53 Kewdale Road, Welshpool, Western Australia, 6106
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditors independence declaration under section 307C of the Corporations Act 2001 is set out on Page 12 for the half year ended 31 December 2006.
Signed in accordance with a resolution of the Directors.
Mark Caruso
Chairman
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