GRD NL 2002-01-31 ASX-SIGNAL-GHOMEX -...

GRD NL 2002-01-31 ASX-SIGNAL-G

HOMEX - Perth

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3. GRD MACRAES

3.1. OPERATIONS - MACRAES GOLD PROJECT

3.1.1 HIGHLIGHTS

* Record fourth quarter gold sales of 47,074 ounces at a cash cost of
A$297 per ounce resulting in annual gold sales of 168,967 ounces, at
a cash cost of A$296 per ounce.

* Commitment to a Continuous Improvement alliance with Caterpillar
(Australia) and Goughs (NZ), following their appointment as the
preferred supplier of mining equipment and maintenance services at
Macraes.

3.1.2 REVIEW OF OPERATIONS

FOURTH QUARTER

Gold production during the fourth quarter was 45,899 ounces, at a
cash cost of A$297 per ounce sold.

Processing of sulphide ore recommenced at the start of October
following two months of oxide processing in the third quarter.

The record quarter was underpinned by favourable ore grade and
recoveries. A better than expected high-grade zone was mined in
Golden Point resulting in 19,312 ounces produced in December.

Mining continued at Deepdell, Golden Point and Innes Mills pits
whilst waste stripping commenced at Frasers South towards year-end.

The appointment of Caterpillar as the preferred supplier of mining
equipment and maintenance services at Macraes follows a comprehensive
owner-mining study and contract mining tender.

The transition from Macmahon Contractors to owner-mining will occur
in June 2002.

2001

Annual gold production of 169,571 ounces at a cash cost of A$296 per
oz is consistent with the previous year's result and the long-term
expectation of 170,000 - 180,000 ounces at 2 cash cost of A$280-320
per ounce.

Ore was sourced from Deepdell, Golden Point, Southern and Innes Mills
pits all of which reconciled favourably to resource model
predictions. The overall reconciliation was 11% favourable to
expectation.

Total ore processed was on target with sulphide processing generally
performing to budget. Oxide processing for two months during the
third quarter while not on budget, enabled deferment of waste
stripping. The option of processing oxide by heap leaching is being
considered.

A total of two lost time injuries were incurred during 2001 resulting
in LTI injury frequency rate of 3. This outcome is consistent with
2000 and compares favourably with the industry average.

KEY PERFORMANCE STATISTICS ARE AS BELOW:

QUARTER ENDED 12 MONTHS ENDED
31 DEC 2001 31 DEC 2001
OPERATING STATISTICS

% Oxide Ore Feed 0% 13.2%
% Sulphide Ore Feed 100% 86.8%

Gold produced (ounces) 45,899 169,571
Gold shipped (ounces) 47,074 168,967

Ore Mined (tonnes) > 0.70 g/t 1,192,281 4,062,474
Ore Mined grade (grams/tonne) 1.60 1.61

Waste Mined (bank cubic metres) 886,123 3,994,762
Mill Feed (dry milled tonnes) 1,009,358 3,994,762

Mill Feed Grade (grams/tonne) 1.71 1.55

Autoclave feed (concentrate tonnes) 46,684 175,946


FINANCIAL STATISTICS

Gold Sales (ounces) 47,074 168,967

AUD AUD

Average Price Received ($ per ounce) 538 537

Cash Operating Cost
- Cash Cost ($ per ounce) excl Royalty 283 284
- Royalty ($ per ounce) 14 12
Total Cash Operating Cost ($ per ounce) 297 295

Gross Cash Operating Margin ($ per ounce) 241 241

USD USD
Total Cash Operating Cost (US$ per ounce) 152 152

Gross Cash Operating Margin (US$ per ounce) 129 129

3.2. DEVELOPMENT

3.2.1 MACRAES GOLD PROJECT

PROCESSING PLANT

The 15% upgrade of Macraes milling capacity from 3.9 Mtpa to 4.5 Mtpa
(MREP-2) is on schedule for completion by mid 2002. The annualised
mill throughput for December was 4.25 Mt whilst the annualised
throughput of sulphide ore in 2001 was 4.16 Mt. The upgrade entails a
series of de-bottlenecking and efficiency enhancing activities.

OWNER-MINING

The appointment of Caterpillar (Australia) and Goughs (NZ) as the
supplier of equipment and maintenance services has been expanded to
include a formal Continuous Improvement agreement. The risk and
reward agreement binds both parties to ongoing investment in
continuous improvement initiatives targeting a minimum 2% improvement
in mining cost per annum.

3.2.2 REEFTON GOLD PROJECT

Board approval to develop the Reefton Gold Project was obtained in
December following successful conclusion of the outstanding matters
relating to the existing 15-year access agreement with the Department
of Conservation

The development of the project will entail establishing the necessary
infrastructure including an access road and bridge prior to the
commencement of major earthworks and plant construction in September
2002.

The viability of the Project was secured following the forward sale
of 200,000 ounces at historically high gold prices averaging over
$665/oz on a spot deferred basis. GRD is now in a position sell up to
80% of the future gold production. taking full advantage of the near
record high NZD gold price.

3.3. EXPLORATION

3.3.1 MACRAES GOLD PROJECT

FRASERS NORTH OREBODY EXTENSION

Success was encountered from further drilling of this established ore
body, providing an indication of potentially significant Resource
extension.

The first hole completed to target depth RCD4218 intersected weak
Hanging Wall mineralisation of 6m at l.llg/t at 4l2 metres.

The next two drill holes RCD 4220 and RCD 4221 respectively 200m and
400m south intersected the Hanging Wall at a slightly shallower depth
than RCD4218 and intersected strong gold mineralisation with visible
gold observed in one of the drill holes.

The significant intersections are listed below.


HOLE FROM RL TO RL LENGTH GRADE CUMULATIVE GOLD
ID (m) (m) (m) (g/t) (gm)

380 390 10 2.32 23.2
392 396 4 0.92 3.68
404 407 3 0.72 2.16
409 433 24 1.76 42.24*
RCD4220 436 440 4 0.83 3.32
443 444 1 0.88 0.88
446 456 10 1.15 11.5
446 467 1 1.52 1.52
469 472 3 1.26 3.78
476 480 4 0.94 3.76
Total 100 64 1.50 96.04

382 406 24 2.93 70.32
410 412 2 1.34 2.68
RCD4221 427 428 1 0.9 0.90
482 464 2 1.07 2.14
480 487 7 0.67 4.69
Total 105 36 2.24 60.73

* Interval 424 - 425m assayed at 46.7 g/t. The intercept was however
calculated with a standard 15 g/t cut.

These two drill holes have extended the Fraser's North Orebody a
further 400 metres down dip to the east and the ore body still
remains open to the South. Drilling during the first quarter of 2002
will continue on a 200 metre spaced pattern to determine the full
width of the extension to the ore body.

MACRAES NORTH

An exploration permit for Macraes North covering the northern 7 km of
the Hyde Macraes Shear Zone has been obtained, successfully
completing the 10-year strategy of having the entire Hyde Macraes
Shear Zone under GRID Macraes control.

The Macraes North exploration permit contains the known northern
strike extensions of the currently producing Deepdell pit and a
number of old workings (Coronation, Nunns, NZGT and Mareburn) and
previous explorers of the respect workings have recorded a number ore
grade drill intersections as listed below.

HOLE FROM RL TO RL LENGTH GRADE CUMULATIVE GOLD
ID (m) (m) (m) (g/t) (gm)

N2 19.09 22.7 3.61 2.30 8.30
N4 41.17 46.81 5.64 1.69 9.53
NNRC8 10 18 8 2.04 16.32
NNRC9 9 13 4 3.77 15.08
NNRC16 17 20 a 1.89 15.12
NNRC21 20 23 3 1.77 5.31
MEH21 3 12 9 2.17 19.53
MEH17A 3 6 3 60.77 182.3
9 12 3 3.02 9.06
CH11 1 7 6 2.09 12.54
CH17 3 7 4 2.01 8.04

3.3.2 REEFTON GOLD PROJECT

Drilling at Empress located between General Gordon and Souvenir will
be conducted in February and March. The outcome will determine the
final pit designs, project layout and development schedule,

3.4. MINERAL RESOURCE AND ORE RESERVE

3.4.1 MINERAL RESOURCE

The Mineral Resource Estimate as at 31 December 2001 is 5.19 million
ounces from 109.12 million tonnes of ore at an average grade of 1.33
g/t.

MINERAL RESOURCE ESTIMATE AS AT 31 DECEMBER 2001

PROJECT CUT OFF GRADE TONNAGE GRADE OUNCES
(G/T) (MT) (G/T) (Moz)
Macraes 0.5 94.27 1.27 3.85
Reefton 0.9 14.85 2.81 1.34
Total 109.112 1.33 5.19


The Macraes Mineral Resource Estimate of 3.85 million has decreased
by 320,000 ounces, through annual depletion and sterilisation of
uneconomic gold following the conversion of Southern pit to a
tailings impoundment.

3.4.2 ORE RESERVE

The Ore Reserve Estimate as at 31 December 2001 is 2.76 million
ounces derived from 54.5 Mt tonnes of ore at an average grade of 1.58
g/t.

ORE RESERVE ESTIMATE AS AT 31 DECEMBER 2001

PROJECT CUT OFF GRADE TONNAGE GRADE OUNCES
(G/T) (MT) (G/T) (Moz)

Macraes 0.5 47.6 1.43 2.18
Reefton 0.9 7.0 2.59 0.58
Total 54.5 1.58 2.76

The Macraes Ore Reserve estimate of 2.18 million ounces remains
largely unchanged since 1997 despite the depletion of 0.68 million
ounces through production over the past five years.

This has been achieved through the introduction of pressure oxidation
and the subsequent 20% improvement in gold recovery, mine planning
enhancements and infill drilling.

The overall Resource to Reserve conversion amounts to only 53%.

3.5. HEDGING

As at 31 December 2001, the mark to market value of the Company's
gold hedge and options book was $96.18 million deficit. This mark to
market was based on a spot price of $539.17 (US$276 00 and A$/US$
exchange rate of 0.5119) at the end of the quarter.

The mark to market value of the Company's gold hedge and options book
has reduced to $85 million deficit as at 29 January 2002.

A full copy of the hedging table is available for purchase from ASX
Customer Service on 1 300 300 279. Charges apply.

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Gyro