Gold Ridge Project Update
17 May 2010 - 6:49PM
UK Regulatory
TIDMAGLD
RNS Number : 0237M
Allied Gold Limited
17 May 2010
FOR IMMEDIATE RELEASE
17 May 2010
allied gold limited
("the Company")
Media Release
GOLD RIDGE (SOLOMON ISLANDS)
A$64M LUMP SUM REFURBISHMENT CONTRACT
TOTAL PROJECT SPEND ESTIMATED AT A$150M
FIRST GOLD PLANNED FOR Q1 2011
Allied Gold has awarded an A$64 million Engineering Procurement & Construction
(EPC) contract as part of A$150 million re-development of the 120,000 ounce per
annum Gold Ridge mine in the Solomon Islands.
The EPC contract with GR Engineering Services (GRES) involves the refurbishment
of the existing Gold Ridge process plant and its expansion from 2Mtpa to a
throughput of 2.5Mtpa, with first gold pour expected in the March quarter 2011.
GRES has worked closely with Allied Gold and its 100% owned subsidiary Gold
Ridge Mining Limited (GRML) in developing preliminary designs and budget
estimates. The execution of the EPC contract supersedes a Letter of Intent
agreed with GRES in March this year.
The Gold Ridge plant modifications include installation of a 28 meter diameter
thickener, tailings detoxification circuit and an intense leach reactor to treat
coarse gold in lieu of the gravity tables that were installed in the original
plant and additional three adsorption tanks.
To complete Gold Ridge's redevelopment, Allied will spend a further A$86M on
activities including civil construction, the purchase of mine fleet and
equipment, power station, accommodation, offices and operations buildings, first
fills and project insurances, operational manning buildup and training, and
landowner resettlement housing and associated costs.
About Gold Ridge:
The Gold Ridge mine, located on the island of Guadalcanal, was constructed in
1997/98 by GRES whose key personnel (as JR Engineering) initially engineered and
constructed the project in 1998. The mine operated for 22 months and closed in
June 2000 due to local ethnic tensions. Ore mined from one of the four
identified pits produced 210,000 ounces of gold. As a result of the closure the
ownership of the project and GRML passed to the American Home Insurance Company
(AHAC). In July 2003 the Australian Federal Government together with Pacific
Forum countries agreed to send Regional Assistance Mission to Solomon Islands
(RAMSI) to stabilise and commence process of rebuilding the nation.
In June 2004 AHAC commenced sale process of the Gold Ridge Project, and by
December 2004 Australian Solmons Gold Limited (ASG) signed a purchase agreement
which was settled in May 2005. ASG commenced carrying out re-establishment of
site infrastructure, feasibility studies and exploration activities. In 2008
GRES was selected as preferred contractors to carry out the engineering,
procurement and construction of the gold process plant. Part of work was also to
generate capital and operating costs for the development and operation of the
process plant.
In September 2009 Allied Gold announced an agreed off-market takeover offer for
ASG shares which was completed early in 2010.
The current Probable Reserves at Gold Ridge are 19.560Mt at 1.8g/t gold for 1.15
million contained ounces. The reserves have been estimated from the following
resources.
+-----------+---------+-------+---------+
| Class | Tonnes | Au | Cont. |
| | (000's) | Grade | Au |
| | | (g/t) | Ounces |
| | | | (000,s) |
+-----------+---------+-------+---------+
| Measured | 5,880 | 1.9 | 359 |
+-----------+---------+-------+---------+
| Indicated | 23,610 | 1.7 | 1,268 |
+-----------+---------+-------+---------+
| Total | 29,490 | 1.7 | 1,627 |
| M&I | | | |
| Resources | | | |
+-----------+---------+-------+---------+
| Inferred | 8,300 | 1.8 | 480 |
| | | | |
+-----------+---------+-------+---------+
The current mine plan will realize gold production of approximately 943,000
ounces of gold over a 7.8 year mine life or approximate average annual gold
production of 120,000 ounces. The ore will be mined from four deposits.
A full copy of the announcement including a map of the Gold Ridge project, is
attached as a link to this announcement:
http://www.rns-pdf.londonstockexchange.com/rns/0237M_-2010-5-17.pdf
For further information, contact:
Allied Gold Limited
Mark Caruso
Executive Chairman
T:+61 8 93533638
Frank Terranova
Chief Financial Officer
T: +61 7 3252 5911
M: +61 448 187 557
E: fterranova@alliedgold.com.au
Peter Torre
Company Secretary
T: +61 8 9287 4604
E: peter@torrecorporate.com.au
Beaumont Cornish Limited
Roland Cornish
Beaumont Cornish Limited
T: +44 (0) 20 7628 3396
This information is provided by RNS
The company news service from the London Stock Exchange
END
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