re: costerfield gold Highlights• Mining commenced at the Augusta...

re: costerfield gold Highlights
• Mining commenced at the Augusta gold and antimony deposit near Costerfield in central Victoria.
• Plant construction was 70% complete and progressing towards a production startup late in the June quarter.
• Mining of both E and C Lodes commenced. Approximately 4,900 tonnes of ore estimated at 31.6g/t gold and 9.9% antimony was mined and stockpiled.
• Shareholders authorised directors to issue up to 20 million shares.
Operations
Bradco Pty Ltd commenced earthworks and open cut mining on the 9th January. By the end of the quarter they successfully completed all major earthworks consisting of the access road, the creek diversion and the evaporation pond and were well advanced with mining in both the E lode open cut and the C lode open cut/ portal excavation.
Plant construction is approximately 70% complete but is slightly behind plan and commissioning is now expected in late May with production in June 2006.
The work plan variation for the Costerfield Plant was approved by the Department of Primary Industries on the 6th February 2006.
A total of $4.41 million was spent by AGD Mining during the quarter. Of this $3.68 million was associated with the Costerfield Project. The main items consisted of the processing plant construction $1.62 million, infrastructure $0.78 million and open cut mining $0.98 million.
Despite some escalation in earthworks and mining costs, and some over-expenditure associated with the evaporation pond, the overall project cost estimate of $12.5 million is still achievable.
The company’s cash position at the end of December was $2.9 million.
Project Development
Mining
Mining of both E and C Lodes was well advanced and confirmed the ore body interpretation and grade. Approximately 4,900 tonnes grading an estimated 31.6g/t gold and 9.9% antimony was mined and stockpiled. The estimated grades are based on grab samples and are expected to be accurate to within +/-25%. The higher than expected grades are a result of the visibility and continuity of the ore structures. This has allowed better-than-expected mining performance and excavation control, hence the higher than forecast grades.
The open cut noise bund and water diversion bund were substantially complete.
The C Lode pit is well advanced to the portal location and it is expected underground development activities will start in late April early May.
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