article explains today's buying

Thursday, April 21, 2005
GIANTS Reef will increase the ore-milling rate at Warrego from 170,000 tonnes per annum to 250,000tpa following the changed nature of the orebody which now requires a bulk mining approach.

Infill drilling has revealed marked changes in the nature of the orebody below the 8 Level at the Chariot gold mine, indicating the dip moderates and is of a lower grade than both above the 8 Level – and as estimated in the pre-mining calculations at 13 grams per tonne gold.

The new understanding means long-hole stoping is no longer appropriate.

The company said that in many areas below the 8 Level the waste rock was not thick enough to sustain stable wall pillars. The bulk mining method will increase dilution and lower overall mined grades.

Giants Reef said the Warrego treatment plant has a design capacity of 300,000tpa and is capable of processing the extra tonnage.

A current infill and extension drilling campaign is due for completion by next month with the resources and reserves to be re-estimated for inclusion in the June quarter report.

It was not clear what the new gold production would be. Recent operational difficulties at Chariot saw expected output for the March quarter revised down by 3000 ounces to 14,000oz. At that time Giants Reef said production for the June quarter would be 18,000-20,000oz.

Shares in the miner have taken a beating over the past weeks, but today gained 13.8% to 3.3c on the back of the announcement.