what is the latest on giants, page-7

May 24

TROUBLED Northern Territory gold miner Giants Reef Mining is believed to have scuttled a $18 million capital raising and is now considering an $8 million convertible note issue.

xxxxxxxxxx understands the potential convertible note issue is the more likely of two financing options being considered, with Adelaide-based Rundell Capital said to be one of the parties involved in the deliberations.

Giants Reef hit trouble at its Tennant Creek operations in the March quarter after a damaged jumbo negatively affected production for the quarter. The following month the company warned of a significant change in the tenor and gold mineralisation of the mainstay Chariot orebody.

The change in mineralisation raised concerns about the estimated reserves and the company is now in the midst of a drilling campaign in a bid to better understand the orebody.

It is believed the drilling is progressing better than expected, especially at the 12 Level.

Giants Reef has been in voluntary suspension on the ASX since 2 May 2005.

At the end of the March quarter the company had just over $700,000 in the bank, with a $9 million debt owing to ANZ. It also has hedging commitments of 47,805oz for 2005-06 and 31,610oz in 2006-07.

xxxxxxxxxx has been unable to contact Giants Reef management.



Mining at Giants Reef's Tennant Creek operations in the Northern Territory