AGLD Allied Gold

RNS Number:3359T
Allied Gold Limited
29 April 2008


For immediate release                                             29 April 2008

                              ALLIED GOLD LIMITED
                          ("ALLIED" OR "THE COMPANY")

                     QUARTERLY REPORT FOR THE PERIOD ENDED
                                 31 March 2008


As required by the rules of the ASX, the Company has announced its quarterly 
report for the period ended 31 March 2008.


HIGHLIGHTS

  * Allied Gold's 100% owned Simberi Oxide Gold Project, located in offshore
    Papua New Guinea, produced first gold in February 2008
  * Simberi produced 18,895 oz of gold for the March quarter at a cash cost
    of AUD$363 per oz
  * Letter of Intent signed with Barrick Gold Corporation (Barrick), the
    world's pre-eminent gold producing Company, whereby Barrick will
    individually fund up to AUD$20 million of expenditure in order to gain a 70%
    interest in the exploration licence that encompasses Big Tabar and Tatau
    Islands
  * Barrick subscribed for 17,647,059 fully paid ordinary shares in Allied
    Gold at $0.85 per share upon execution of the Letter of Intent, thereby
    injecting AUD$15 million into Allied Gold
  * Drilling continues to deliver highly encouraging results on areas
    located outside of the current mine plan. Best results previously announced
    in exploration updates include:
          
    - 8m at 5.51 g/t gold from 1m at South Samat
    - 7m at 4.49 g/t gold from 1m at South Samat
    - 6m at 3.52 g/t gold from 5m at Sorowar West
    - 13m at 2.20 g/t gold from surface at Sorowar West
    - 22m at 2.14 g/t gold from surface at South East Sorowar
    - 5m at 4.81 g/t gold from 75m at South East Sorowar
    - 9m at 6.19 g/t gold from 41m at South East Sorowar


SIMBERI OXIDE GOLD PROJECT - OPERATIONS

The Simberi Oxide Gold Project poured its first gold in early February 2008 and
the production ramp up through its newly constructed process plant at Simberi
continues to progress well.

Mining has been centered on the South Samat and East Samat pits. In particular
South Samat has yielded good grade material, which has assisted in compensating
for the late commissioning of the processing plant.

The gold price received for sales during the March quarter was impacted by the
fact that the vast majority of gold sold was delivered into the Company's gold
hedging commitments at US$700/oz.

Most of the waste mined was related to haul road construction and road sheeting
activities.

The EPCM Contractor has been issued with a list of items on the processing plant
that require remediation. Project completion costs are forecast to be AUD$92.1
million, some AUD$11.7 million over the original budget. Costs incurred as at 31
March were AUD$87.5 million.

Construction of the rope conveyor and overland conveyor to the ROM pad, which
will carry ore from the Sorowar pit, is essentially complete and commissioning
is advancing according to plan.


EXPLORATION


Simberi Island - ML 136 and EL 609

The fourth Company-owned drill rig arrived in January and the smaller diamond
drill (DFM400) completed 67 metres of coring at Samat and 111 metres at Adora
testing an IP anomaly. At the end of the month the rig was converted to auger to
undertake grade control drilling. A total of 415 grade control auger holes were
completed at Samat and Sorowar for a total length of 2,077 metres.

The two reverse circulation (RC) drills commenced drilling at Sorowar - south
east, north west and west of the proposed pit. These drills collectively
completed 6,492 metres of RC in 71 drill holes at Sorowar and one rig installed
8 pre-collars for a total length of 723 metres at Pigiput in preparation for
deep diamond tails targeting sulphides.

The multipurpose drill (UDR650) finished RC drilling in the Samat area for a
total length of 580 metres in 13 holes and then, after some scheduled
maintenance, was converted to diamond and commenced drilling at Pigiput as part
of the resource definition and exploration program designed by Golder Associates
targeting the underlying sulphide mineralisation. By the end of the quarter one
diamond tail had been sorted and 57 metres of core had been drilled.

2,950 metres of IP line was surveyed in January and the crews were dismantled
pending analysis of all the IP information gathered to date. A report will be
issued in the June quarter.


Samat

Drilling at Samat South focused on possible extension outside the pit design
with a focus on the area north of the pit. Results of current program (holes RC
1436 to RC1440 inclusive) defined additional mineralisation outside the pit.


Adora

Drilling at Adora was aimed at testing shallow oxide targets and some deeper
sulphide targets that had been defined by the IP surveys. The drilling revealed
thin and scattered gold mineralisation and the IP target did result in gold
mineralisation being encountered with a best intersection of 6.9m @ 8.11g/t gold
from 47.1 metres.


Sorowar

Drilling at South East Sorowar confirmed the presence of surface and
near-surface gold mineralisation in oxide materials, south east of the Sorowar
final pit limit. One of the results tables also include results from two Monun
Creek holes. Drilling of this area is continuing to define the extents of the
mineralisation with a plan to undertake a resource estimate.

The drilling at Sorowar West has identified a new area of mineralisation located
within 300 to 400 meters of the RopeCon load out terminal. The drill hole
intersections to date are extremely encouraging given that the mineralisation
comprises oxide material at surface or near-surface. Drilling will continue
north towards the Sorowar pit limit and south east.

Additionally, drilling has commenced to the north west of the Sorowar pit and to
date 22 holes for a total length of 2,314 metres has been completed, still
waiting assay results.

Some exploration assays have been carried out on site in the process laboratory
while the construction of the exploration assay laboratory and new sample
preparation facility is being finished off, which is expected in the June
quarter.

Construction of the new core shed was nearly completed and is ready to receive
samples at one end. The building will be finished in April.


FARM-IN & EXPLORATION JOINT VENTURE ON TATAU AND BIG TABAR ISLANDS (EL609) WITH
BARRICK GOLD CORPORATION

Allied Gold signed a Letter of Intent ("LoI") in March 2008 with a wholly owned
subsidiary of the world's largest gold mining Company Barrick Gold Corporation
("Barrick"). Contained in the LoI is for Barrick to acquire up to a 70% interest
in exploration licence 609 on Big Tabar and Tatau Islands, part of the Tabar
Island Group Project, through a Farm-in and Joint Venture.

Barrick is required to sole fund AUD$8 million of exploration expenditure within
four years to earn a 51% interest, with another AUD$12 million required within
the next four year period to earn 70% in the exploration licence.

Barrick has committed to a minimum expenditure of AUD$2 million in the first two
years, but has budgeted to spend US$2.1 million in year one. If Barrick
withdraws at any time after it has met the minimum expenditure but before it
earns 51% equity in the joint venture, it will not retain any interest in the
exploration licence.

Additionally, Barrick subscribed for 17,647,059 shares at $0.85, representing
4.7% of the enlarged share capital of the Company, thereby injecting AUD$15
million into Allied Gold. The shares issued to Barrick are subject to voluntary
escrow until 28 March 2010 or upon the date that Barrick meets the Minimum
Expenditure as set out under the Terms of the LoI.

The execution of the agreement provides for a significantly more expedient
manner to further explore, evaluate and exploit the exploration potential on
Tatau and Big Tabar islands, whilst Allied focuses on optimising performance of
its recently commissioned Simberi Gold Project.

Susequent to period-end, Allied Gold has issued 1,000,000 fully paid ordinary
shares to Kennecott Explorations (Australia) Ltd, a 100% owned subsidiary of Rio
Tinto Limited, and 352,112 fully paid ordinary shares to Nuigini Mining as
consideration for relinquishment the each Company's Claw Back right under the
original Purchase Agreement to acquire the Simberi Island and Tatua and Tabar
Islands projects.


CORPORATE


Cash and Debt

At 31 March 2008, Allied Gold Limited had AUD$14.77million cash in hand. The
Simberi Finance Facility was drawn down to AUD$23.4 million at period-end.


Gold Hedging

Allied has outstanding hedging commitments of 153,630 ounces (ozs) of gold at an
effective price of US$700/oz for delivery between June 2008 and December 2011.
The Participating Gold Forward Option that the Company has entered into allows
Allied to participate in any upside in the price of gold for 40% (representing
61,452 ozs) of the Company's hedging commitment while remaining protected at
US$700/oz at all times as a worst case on the entire 153,630 ozs hedged.


Securities on Issue

As at 31 March 2008 issued securities comprise;

-    374,833,613 fully paid ordinary shares listed on the Australian
     Stock Exchange (ASX) and on the London Alternative Investment Market (AIM)

-    2,970,000 unlisted options exercisable at $0.50 expiring 11
     December 2008

-    1,000,000 unlisted options exercisable at $0.40 expiring 31 December 2008

-    1,000,000 unlisted options exercisable at $0.44 expiring 31 December 2008

-    750,000 unlisted options exercisable at $0.80 expiring 31 December 2008

-    713,261 unlisted options exercisable at $0.72 expiring 30 June 2009

-    590,000 unlisted options exercisable at $0.50 expiring 30 October 2009


During the period, the Company completed two share placements. In January
AUD$10.5 million was raised through the issue of 14,621,844 shares at AUD$0.72
per share to existing institutional investors and a further 17,647,059 shares
were issued to a subsidiary of Barrick Gold Corporation at AUD$0.85 per share
raising AUD$15.0 million in March.

Additionally, 550,000 shares were issued after the exercise of $0.50 unlisted
options and 713,261 unlisted options exercisable at $0.72 expiring 30 June 2009
were issued to Mirabaud Securities as part consideration for managing the
January 2008 share placement.

Copies of the full announcement along with the Quarterly Cash flow Report will
be  uploaded to the Companies website - www.alliedgold.com.au  and can be viewed
in due course.  The full version of the announcement is also available as a link
to this announcement:

http://www.rns-pdf.londonstockexchange.com/rns/3359t_-2008-4-29.pdf


For more information:
Mark Caruso                              T:+61 8 93533638
Executive Chairman
Roland Cornish                           T: +44 (0) 20 7628 3396
Beaumont Cornish Limited

Competent Persons


The information in this Stock Exchange Announcement that relates to Mineral
Resources, Project Financial modelling, Mining, Exploration and Metallurgical
results, together with any related assessments and interpretations, has been
approved for release by Mr C.R. Hastings, MSc, BSc, M.Aus.I.M.M., a qualified
geologist and full-time employee of the Company. Mr Hastings has sufficient
experience which is relevant to the style of mineralisation and type of deposit
under consideration and to the activity which he is undertaking to qualify as a
Competent Person as defined in the 2004 Edition of the "Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr
Hastings consents to the inclusion of the information contained in this release
in the form and context in which it appears.


The information in this Stock Exchange Announcement that relates to Ore Reserves
has been compiled by Mr J Battista of Golder Associates who is a Member of the
Australasian Institute of Mining and Metallurgy. Mr Battista has had sufficient
experience in Ore Reserve estimation relevant to the style of mineralisation and
type of deposit under consideration to qualify as a Competent Person as defined
in the 2004 Edition of the "Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves". Mr Battista consents to the
inclusion of the information contained in this release in the form and context
in which it appears.



                      This information is provided by RNS
            The company news service from the London Stock Exchange

END
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