Exploration Update and Barrick JV variation
March 01 2010 - 6:34AM
UK Regulatory
TIDMAGLD
RNS Number : 8508H
Allied Gold Limited
01 March 2010
("Allied", "Allied Gold" or "the Company")
Exploration Update: Tatau and Big Tabar Islands (PNG)
Barrick Gold Farm-in and JV Varied
Allied Gold to Manage Future Exploration Programme
Allied Gold Limited ("Allied Gold" or the "Company") (TSX:ALG; ASX:ALD;
AIM:AGLD) and Barrick Gold have agreed to vary their exploration programme and
commitments for the Big Tabar and Tatau Islands, 20 kilometres south of the
Allied Gold's current 75,000 - 80,000ozpa Simberi gold mine in Papua New
Guinea.
Allied Gold had previously agreed in March 2008 to a farm-in which would have
seen Barrick initially earn a 51 per cent interest in the Big Tabar and Tatau
exploration licences, subject to a minimum four year spend of A$8 million.
Barrick had expended more than $A10 million as of January 2010
Allied Gold will now retain 100% interest in the Big Tabar and Tatau Islands
and has agreed to pay Barrick an immediate $A2.5 million payment and a further
$3 million in July either as cash or Allied shares. The issue of any Allied
shares to Barrick will be at a 10% premium to market. Barrick has also agreed
to place its holding in Allied Gold into escrow until 2012.
Allied Gold Executive Chairman Mark Caruso said today, "Two years ago, Allied
Gold was in start-up phase and we did not have the time or resources to devote
to the region's potential, and were also constrained by project financing
covenants. However, given the incremental consolidation of production at
Simberi, it now makes sense from a cost effectiveness and a community
perspective to have our own team more directly leading the exploration
activities at nearby Tatau and Big Tabar. The relationship with Barrick remains
very sound. However, both companies currently have a different resource scale
relative to underpinning development."
Barrick have conducted preliminary drilling on Tabar Island on the Banesa and
Tupinda prospects and identified copper , gold, porphyry style mineralisation
which warrants further assessment. In addition, a significant effort was
dedicated on Tatau to establish base line geological data which confirmed 12
prospects, of which six (6) are highly prospective drill targets. Therefore,
we will seek to accelerate our own drilling program with a scheduled
commencement of drilling anticipated in April on Tatau Island
The Tabar Islands group consisting of the Simberi, Tatua, Mapua and (Big) Tabar
islands in the north of the New Ireland Province in PNG cover approximately
270sqkm.
Preliminary drilling in May 2009 was conducted on the Banesa and Tupinda
prospects on Tatau Island (see Allied Gold's 2009 Annual Report Pages 36-37 for
more detail). Given the historical success of exploration at Simberi, the
Directors are confident of announcing positive further news for the prospects on
the Tatau and Big Tabar islands in due course.
About Allied Gold: The Simberi gold mine (60km from Lihir Island) has produced
150,000 ounces since production commenced in February 2008. Production in 2010
is expected to be approx 75,000-80,000 ounces, with an expansion later in the
year to lift Simberi plant throughput from 2Mtpa to 3Mtpa and gold output
towards 100,000 ozpa. The Simberi sulphide project resource update is expected
in March 2010 with a feasibility study expected during 2011. Allied Gold
acquired the Gold Ridge project in the Solomons Island in late 2009 and
pre-development works are currently underway, with production of 120,000 ozpa
expected in FY2012.
For more information:
+----------------------------------+--------------------------+
| Mark Caruso | T:+61 7 93252 5911 |
| Executive Chairman | |
| | |
+----------------------------------+--------------------------+
| Roland Cornish | T: +44 (0) 20 7628 3396 |
| Beaumont Cornish Limited | |
+----------------------------------+--------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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