Stock still trading at prospective P/e below 5;i am always...

Stock still trading at prospective P/e below 5;

i am always comfortable 'accumulating' at such low P/Es as downside risk is minimal

growth certainly seems to be in place for the future

good to see the stock get some press

Perilya takes a wider view and finds more in reserve at Broken Hill ;Isabelle Oderberg
July 20, 2006

PERTH-based Perilya Ltd has increased the reserves at its Broken Hill base metal mine, thanks to a new mining technique and further drilling.

Perilya upgraded the NSW mine's reserves to 11.7 million tonnes, grading 7.3 per cent zinc, 4.8 per cent lead and 47.9 grams per tonne of silver, representing an 18 per cent increase in zinc and lead metal and a 12 per cent increase in tonnages.

Chief executive Len Jubber said the company would make a more detailed announcement on the reserves upgrade next week, but attributed the rise to a new mining technique in the Pillars area and extensions to the ore body found through further drilling.

"We expect those extensions to continue and we will continue to invest in them in the coming year," he said.

For the fourth quarter to June 30, the Broken Hill mine posted its highest quarterly total metal output since the corresponding quarter in 2003.

The mine's total contained metal production of 57,600 tonnes was up 6.5 per cent on the previous quarter, with constant zinc production, and 19.4 per cent higher lead production.

For the 2005-06 financial year, total ore mined was 2.05 million tonnes, compared to 1.88 million tonnes the previous year.

The full-year total for metal, zinc and lead was up 13.3 per cent year on year, with zinc up 9.2 per cent and lead up 22.4 per cent.

The ore mining rate in the past four months has been at an annualised rate of 2.2 million tonnes, with the company reporting that all key operating indicators had surpassed those reported in the March quarter.

Perilya's other major interest, the Daisy Milano goldmine near Kalgoorlie in Western Australia, produced 6465 ounces of the precious metal during the quarter from 31,473 tonnes of ore at 6.39 grams a tonne. The company said it expected a feasibility study on Daisy Milano would be presented to the board in August.

Mr Jubber said the company is maintaining margins, thanks to production improvements and dramatic increases in zinc prices.

"We have approximately 25 per cent of our production hedged over the next few years and, in principal, we are looking at a hedging range of 20 per cent to 40 per cent, which would enable us to build a platform for growth," he added.