Found this an interesting post and had a look further ,but a lot is summed up in this report ,
AUG do have this built in "intrinsic "value but one of the problem being is still in the ground ,
In their favour they are cashed up though with $12mill
_______________________________________________ Chairman`s Address to Shareholders
AURORA GOLD LIMITED 2002-05-13 ASX-SIGNAL-G
HOMEX - Perth
+++++++++++++++++++++++++ ADDRESS BY MR RORY ARGYLE, CHAIRMAN - AURORA GOLD LTD AT THE ANNUAL GENERAL MEETING PERTH, MONDAY 13 MAY 2002
Ladies and gentlemen, I am pleased to welcome you to Aurora's ninth Annual General Meeting.
The last twelve months have been eventful.
When I addressed shareholders twelve months ago I mentioned that Rio Tinto's then holding of 35% of Aurora, acquired as a consequence of its acquisition of Ashton Mining, was for sale. In the events that followed, Guinness Peat Group acquired that stake in the course of its bid for the Company and has emerged as our major shareholder with slightly less than 40% of Aurora`s issued share capital.
Guinness Peat Group sought and was granted two seats on the Board, now reduced in number from six to five. In January of this year, following the resignation of our then Managing Director and Chief Executive Officer, the Board appointed one of the Guinness Peat representatives, Mr Michael Jefferies, as Managing Director and Chief Executive Officer, on secondment terms.
The reconstituted Board re-assessed Company objectives, in the light of prevailing conditions and circumstances, particularly the lack of market support for Aurora shares, and came to two key conclusions first, that the policy of withdrawal from Indonesia on completion of mining operations at Mt Muro should be endorsed, and second, that in lieu of proceeding to development of the Morobe Project, the preferred course was to extract value for shareholders by sale, if an acceptable price could be secured - a view shared by our joint venture partners, CDC Capital Partners and Kula Fund Limited.
Accordingly, as announced on 30 January, we proceeded with our joint venture partners to appoint Rothschild Australia to initiate a sale process and to solicit buyers. That sale process is presently in progress and, as a result, I am unable to provide you with any meaningful update except to say that several major goldminers are participating in the process and we await the outcome.
In parallel with the sale process, we have been progressing the final feasibility study for the Morobe Project. This study has progressed more slowly than had been planned but is now nearing completion.
Morobe contains a resource of some 6.3 million gold equivalent ounces with significant opportunity for expansion, adjacent to the main Hidden Valley deposit and proposed mine infrastructure. Aurora's 50% interest is a major Company asset.
From an environment perspective the Project will potentially set a new standard for PNG with all waste and tailings contained in long-term sustainable landform designs at site. Land ownership and royalty division has been decided by the Land Court, in a decision accepted by the local community. The community strongly supports mine development and the opportunities (ie royalty, compensation, employment, health, educational and business opportunities) associated with it. Similarly the Project has strong National Government support being the first major mining development proposed in PNG since the Lihir gold project in 1994.
Based on current estimates we anticipate a 5mtpa throughput rate, a 10-year mine life and production of some 300,000oz gold and 5Moz silver annually (or 360,000 to 380,000 gold equivalent ounces), at a total cash cost of around US$150 per gold equivalent ounce.
If the current sale process fails to deliver value then the Board will reconsider its strategy. In a rising gold market there are likely other options.
Turning now to Mt Muro. Aurora was formed in 1993 to acquire the then gold interests of Ashton Mining Ltd; the prime asset being a 90% interest in the Mt Muro Gold and Silver Project in Indonesia. The project summary, included in the prospectus issued by Aurora in August 1993, forecast that Mt Muro would produce 994,000 ounces of gold and 18,777,000 ounces of silver or 1,212,000 gold equivalent ounces, from proved and probable ore reserves of 8.4 million tonnes. Cash costs, on a gold equivalent basis, were estimated at US$188 (constant dollar ), over an eight year mine life.
Production commenced at Mt Muro in November 1994 with a new plant processing ore at a rate of 1 million tonnes per annum. Subsequently, this plant was upgraded to increase its ore processing capacity to 1.5 tonnes per annum, thereby increasing the throughput rate by some 50%, and Aurora acquired the full 100% interest in the project.
I am pleased to report that on cessation of mining, probably in the next couple of weeks, Mt Muro will have produced during its eight year mine life, approximately 1.7 million gold equivalent ounces from 11 million tonnes of processed ore, at an average cash cost of US$234 per ounce.
Mt Muro has been a highly successful operation, both technically and commercially, and great credit is due to the management over those years and never more so than the current management. The operating difficulties have been substantial and have been well chronicled in our reporting to shareholders over the years.
To construct a major mine in such a remote location and then maintain operations over an extended period to effect recovery of the mineable resource, is a very significant achievement for a small Australian mining Company indeed any mining Company. We can all be proud of that achievement and I thank and congratulate each and every one of our managers, supervisors and the workforce at large on a job well done.
During the year ended 31 December 2001, Aurora discovered that potential existed for repetition of the Mt Muro style gold mineralisation in a region designated as the "Western Areas" of the Contract Of Work and located approximately 12 kilometres due west from the Mt Muro treatment plant site. This work and the currently assessed potential of these Western Areas is described in our recent Annual Report and I will not repeat it here. Whilst Aurora has decided not to fund additional expenditure on these areas they remain highly prospective. Accordingly, expressions of interest were sought from other mining companies with known interests in Indonesia and an appetite for investment in mining in Indonesia. Discussions with third parties have ensued and Aurora is presently examining the opportunity to dispose of its shares in the Indonesian Company which holds the Contract Of Work, carrying with it all the rights to the remaining Mt Muro operation including the Western Areas and the plant.
Whilst the reclamation and rehabilitation work to all former mining areas remains our obligation and is now well in hand to be completed during the third quarter of this year, a sale of the Mt Muro COW Company, if achieved, would transfer the obligations to dismantle the Mt Muro plant, if indeed it is to be dismantled, to the purchaser and allow us an earlier exit. I say "if it is to be dismantled" because the plant could be used to treat ore from the Western Areas, at some future time, should they prove economic, and in place it is an attraction to the party with which we are now negotiating. We expect to be in a position to make a further announcement on this matter during the next month, assuming a successful conclusion to our current negotiations.
Aurora's remaining assets are interests in exploration areas within Australia, notably Western Australia. We continue to maintain a limited budget for ongoing exploration in those areas. The Board is currently considering the results of a pre-feasibility study on the Fortitude Gold Deposit in the Yilgarn Craton, south of Laverton and the Company is presently undertaking further drilling at the Gallant Base Metal Prospect, with drilling in progress at this time.
When all of the information is to hand the Board will consider whether Fortitude should be developed as a stand-alone project or possibly as part of a larger project, perhaps by joining forces with other deposit owners in the region.
In summary, our focus at this time is on the closure of Mt Muro, rehabilitation of the mining areas and the sale of our remaining interests associated with Mt Muro, enabling withdrawal from Indonesia. Once that has been completed we will be in a better position to assess Aurora's ongoing role and objectives having regard for the outcome of the Morobe sale process, the opportunities that are then open to the Company and to the best interests of all shareholders.
