thick high grade gold intersections from drilling

ALLIED GOLD LTD
ACN 104 855 067
ABN 86 104 855 067
8 February 2005
Australian Stock Exchange
Company Announcements
“This press release is not for dissemination in the United States and shall not
be disseminated to United States news services.”
Dear Sir/Madam,
THICK HIGH GRADE GOLD INTERSECTIONS FROM DRILLING
AT THE SOROWAR DEPOSIT
The Company is pleased to announce that thick, high-grade surface and near
surface oxide gold intersections have been received from reverse circulation (“RC”)
drilling at the southern portion of the Sorowar gold deposit on Simberi Island, eastern
PNG. Results include;
• 45m at 6.26 g/t gold from 37m in RC 943 (from overall result of 90m at
3.38 g/t gold from surface).
• 37m at 3.15 g/t gold from 65m in RC 945 (from overall result of 109m at
1.32 g/t gold from surface).
• 20m at 4.01 g/t gold from surface in RC 941 (from overall result of 81m
at 1.27 g/t gold from surface).
• 12m at 4.49 g/t gold from 12m in RC 942 (from overall result of 90m at
1.29 g/t gold from surface).
Sorowar Drilling Programme
On 25 November 2004, a 44 hole (3,560 metres) RC drilling programme commenced
at the southern end of the Sorowar oxide gold deposit to further define and test
extensions to mineralisation proximal to the currently designed pit.
Results received so far from this drilling programme support the Company’s view that
the tonnage and grade of the Sorowar gold deposit are currently understated, giving
the Company a high level of confidence that final pit optimisation studies will result in
increased reserves and gold production.
Unit 15, Level 1, 51-53 Kewdale Road
Welshpool, Western Australia 6106
PO Box 235, Welshpool DC 6986
Telephone: 61 8 9353 3638
Facsimile: 61 8 9353 4894
Email: [email protected]
Web: www.alliedgold.com.au
This potential is clearly demonstrated by the results of drillholes RC933, RC944 and
RC945 which were drilled from 25m to 35m to the west of the proposed Sorowar pit.
The majority of the other drillhole intersections detailed in the Table (below) occur
below the base of the previously designed Sorowar pit.
Significant results received to date:
Drillhole Northing Easting Dip/Azimuth Interval Intersection Mineralisation
(mN) (mE) (°) (m) (m @ g/t Au) Type
local grid local grid local grid
RC932 1,390 200 -60°/090° 0-80 (eoh) 80 @ 1.82 oxide 0-80m
including 0-21 21 @ 2.84 oxide
including 47-63 16 @ 4.68 oxide
RC933 1,410 180 -60°/090° 0-64 (eoh) 64 @ 0.62 oxide 0-26m
trans 26-31m
sulphide 31-64m
including 0-20 20 @ 1.15 oxide
RC941 1,230 245 -60°/090° 0-81 (eoh) 81 @ 1.27 oxide 0-24m
trans 24-27m
oxide 27-81m
including 0-20 20 @ 4.01 oxide
including 28-30 2 @ 2.37 oxide
including 36-44 8 @ 1.29 oxide
RC942 1,260 230 -60°/090° 0-90 (eoh) 90 @ 1.29 oxide 0-72m
trans 72-76m
oxide 76-80m
sulphide 80-90m
including 0-55 55 @ 2.08 oxide
with 12-24 12 @ 4.49 oxide
RC943 1,250 190 -60°/090° 0-90 (eoh) 90 @ 3.38 oxide 0-3m
sulphide 3-6m
oxide 9-92m
sulphide 82-90m
including 37-82 45 @ 6.26 oxide
with 61-70 9 @ 25.6 oxide
RC944 1,290 160 -60°/090° 0-80 (eoh) 80 @ 0.66 oxide and sulph
including 7-12 5 @ 1.50 oxide
including 44-80 36 @ 1.10 oxide and tr sulph
RC945 1,270 155 -60°/090° 0-109 (eoh) 109 @ 1.32 oxide and sulph
including 7-16 9 @ 1.64 oxide and tr sulph
including 65-102 37 @ 3.15 oxide and tr sulph
The proposed Sorowar pit was designed as part of a Feasibility Study by Lycopodium
Pty Ltd (August 2003) into the establishment of an oxide gold mining project on
Simberi Island. Notwithstanding, as a result of technical due diligence by Allied
during 2004 it became apparent that significant additional potential exists at Sorowar
to substantially increase the oxide resources with further exploration drilling.
Accordingly, during July-August 2004 a first pass extension and resource delineation
drilling programme was carried out at Sorowar, returning numerous thick, robust
grade intersections including;
• 100m at 4.06 g/t gold from surface in RC 888 including 39m at 9.81 g/t
gold from 38m.
• 100m at 2.10 g/t gold from surface in RC 887 including 79m at 2.47 g/t
gold from 12m.
• 120m at 1.73 g/t gold from surface in RC 886 including 44m at 3.84 g/t
gold from 76m.
This drilling programme was successful in identifying significant gold mineralised
zones outside of the proposed Sorowar pit and the Company commenced follow-up
drilling at Sorowar on 25 November 2004.
After completion of the current (second phase) drilling programme, the third and final
phase of RC drilling at Sorowar will be carried out to upgrade the resource status of
mineralisation in the northern portion of the deposit and to further delineate and
define mineralised extensions on the north and east sides of the proposed Sorowar
pit.
To best achieve this outcome in the most expedient timeframe, the drilling equipment
is undergoing modifications which will enable double-shift production rates to be
achieved during February/March 2005. These drilling rates should allow the
company to receive all of the requisite assay data in April, thus enabling the company
to determine final oxide pit dimensions for project development.
Sorowar Resource and Reserve Studies
As a result of the first pass drilling programme (July-August 2004), Allied engaged
Golder Associates to construct a resource model and perform an open-pit
optimisation study for the Sorowar deposit by upgrading the existing Sorowar drilling
database with the results of the Phase 1 programme.
Results from the kriged block model are tabulated below:
Sorowar Oxide Gold Resources (at 0.5 g/t Au cutoff)
Category Million Tonnes Gold Grade (g/t) Ounces
Measured 6.2 1.34 268,000
Indicated 3.2 1.26 128,000
Inferred 4.0 1.15 149,000
TOTAL 13.4 1.26 545,000
(Source: Golder Associates Block Model - January 2005)
As a result of this study, a resource upgrade of 42%, representing an additional
161,000 ounces of gold, has been achieved when compared with the previous
Sorowar resource estimate of 10.9 Mt at 1.10g/t Au for 384,000 ounces (at 0.5 g/t Au
cutoff).
It is expected that the current Phase 2 extension and infill drilling programme will
further increase the dimensions of the Sorowar gold resource, ultimately resulting in
increased reserves and gold production. Accordingly, mining reserve and feasibility
studies are being commissioned for completion as soon as the final results from
drilling are received by the Company.
Total oxide gold resources identified to date in ML 136 on Simberi Island are;
• Oxide Resources
Measured, indicated and inferred (free milling-type - 0.5 g/t Au cutoff)
22.2 million tonnes at 1.24g/t Au (887,000 ounces)
Simberi Island Oxide Gold Deposits – Location Map
Yours faithfully,
J.J. Moore
Managing Director
The information in this Stock Exchange Announcement that relates to the Sorowar Oxide Gold Resources is based
on information compiled by Mr S Godfrey who is employed by Golder Associates and who is a fellow/member of the
Australasian Institute of Mining and Metallurgy. Mr Godfrey 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 Godfrey consents to the inclusion in this Announcement of the material based on this information in the form and
context in which it appears.
The information in this Stock Exchange Announcement that relates to exploration results, mineral resources or ore
reserves, together with any related assessments and interpretations, has been approved for release by Mr. J. J.
Moore, BSc., M.Aus.I.M.M., a qualified geologist and full-time employee of the Company Mr Moore 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”.
“This press release is not for dissemination in the United States and shall not be
disseminated to United States news services.”
For enquiries in connection with this release please contact:
Allied Gold Limited
+61 8 9353 3638 phone
+61 8 9353 4894 fax
[email protected] e-mail
Forward-Looking Statements.
This press release contains forward-looking statements concerning the projects owned by Allied. Statements
concerning mineral reserves and resources may also be deemed to be forward-looking statements in that they
involve estimates, based on certain assumptions, of the mineralisation that will be found if and when a deposit is
developed and mined. Forward-looking statements are not statements of historical fact, and actual events or results
may differ materially from those described in the forward-looking statements, as the result of a variety of risks,
uncertainties and other factors, involved in the mining industry generally and the particular properties in which Allied
has an interest, such as fluctuation in gold prices; uncertainties involved in interpreting drilling results and other tests;
the uncertainty of financial projections and cost estimates; the possibility of cost overruns, accidents, strikes, delays
and other problems in development projects, the uncertain availability of financing and uncertainties as to terms of
any financings completed; uncertainties relating to environmental risks and government approvals, and possible
political instability or changes in government policy in jurisdictions in which properties are located.
Forward-looking statements are based on management’s beliefs, opinions and estimates as of the date they are
made, and no obligation is assumed to update forward-looking statements if these beliefs, opinions or estimates
should change or to reflect other future developments.
Not an offer of securities or solicitation of a proxy.
This communication is not a solicitation of a proxy from any security holder of Allied, nor is this communication an
offer to purchase nor a solicitation to sell securities. Any offer will be made only through an information circular or
proxy statement or similar document. Investors and security holders are strongly advised to read such document
regarding the proposed business combination referred to in this communication, if and when such document is filed
and becomes available, because it will contain important information. Any such document would be filed by Allied
with the Australian Securities and Investments Commission, the Australian Stock Exchange and with the U.S.
Securities and Exchange Commission (SEC).