article re gold

Perilya back into gold


Brad Ricks


Tuesday, February 01, 2005
ZINC miner Perilya has diversified its portfolio by exercising its option to acquire the Daisy-Milano gold mine and tenements near Kalgoorlie, Western Australia from the Ridgeview Group for $13.2 million.

The first gold pour from Daisy-Milano, an underground gold project, has been flagged for March, with production to then ramp up to the forecast annual rate of 50,000 ounces per annum.

Perilya will make an initial payment to the Ridgeview Group of $3.2 million in two equal instalments of $1.6 million, with the first paid earlier this week and the second due prior to June 30 this year.

The first instalment comprised of a cash payment of $800,000 and 828,157 Perilya shares, based upon the average closing price of Perilya shares on the ASX over the ten trading days prior to January 31.

While the balance of the second instalment will comprise a cash payment and issue of shares on a similar basis.

Perilya said the remaining $10 million will be paid over a number of years through production linked payments based on the net cash flow performance of the Daisy-Milano mine.

Meanwhile, at its Broken Hill mine in New South Wales, Perilya said production performance progressively improved during the December quarter, with one of the highest monthly levels of metal production achieved in December.

Zinc and lead production of 37,500 tonnes contained zinc and 14,100t contained lead was up on the previous quarter by 25% and 13% respectively.

Perilya managing director Tim Clifton said the improved performance at Broken Hill was a result of maintenance and rehabilitation programs implemented over the past two years.

He said improvements were seen in both underground and surface activities with increased zinc and lead recoveries in the processing plant and the production of above-budget lead concentrate grades.

Shares in Perilya were trading unchanged this morning at 98c on the ASX.