ASX Announcement Dated 31/10/07
ACTIVITY REPORT FOR THE QUARTER ENDED 30 SEPTEMBER 2007
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HIGHLIGHTS
- Good progress continues to be made in the construction of the Allied Gold’s 100% owned Simberi Oxide Project, located in offshore Papua New Guinea. First gold production is now anticipated in the December 2007 quarter, an approximate five week delay from the schedule previously advised.
- Total project costs incurred to date are AUD$74.4 million and the total spent and committed to date is AUD$80.1 million. The forecast total cost for the project is AUD$87.0 million, an increase of 4.8% from previous estimates. Increased costs were due to company agreed scope changes, over budget EPCM contractor costs, additional freight charges, and holding costs due to slippage in the construction timeline. Allied Gold remains fully funded to project commissioning.
- Initial draw-down of the US$25 million Finance Facility for the Simberi project occurred during the quarter. As a condition precedent to the Facility, Allied Gold hedged 170,000 ounces of gold at an effective price of US$700/oz for delivery between March 2008 and December 2011. 68,000 ounces of the program are through a Participating Gold Forward Option where the company participates in any price upside above US$700/oz.
- Exploration drilling recommenced with one of the four drilling rigs operational and a second rig commissioned subsequent to period-end. The first hole MN-02 located at Monun Valley resulted in an assay of 30.9m at 1.21 g/t Au from 28m, ending in mineralization.
- More significant results were received from 5-metre composite channel sampling along ulldozed tracks. The best results were:
- 45m at 3.42 g/t gold
- 55m at 1.66 g/t gold, both near the planned aerial rope conveyor route
- 120m at 0.95 g/t gold in Monun Valley.
- Geophysical and soil geochemical surveys on Simberi and Tatau islands continue to identify new drill targets. Major induced polarisation (IP) survey commenced on Big Tabar Island.
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