re: litigation last paragraph
SMC FORECASTS US$5.1M (A$6.7M) NET
CASHFLOW IN CALENDAR 2005
· US$22M in calendar 2007 forecast
SMC Gold Limited is a Brisbane-based mining company with coppergold
operations in Chile where it plans a three-fold expansion by 2007.
SMC Gold Limited (SMC) forecasts net cashflow of US$5.1 million (A$6.7 million) for
the 2005 calendar year following the current expansion of operations in Chile,
Managing Director Rob Kidd announced today.
Net cashflow is forecast to rise to US$22.0 million (A$28.9 million) in calendar 2007
as a result of the second stage of expansion, he said.
The forecasts are based on a copper price of US$1.50 a pound (price currently
US$1.68). See table below.
Mr Kidd is holding briefings on the company in Brisbane, Sydney and Melbourne over
the next few days.
He will move from Brisbane to Chile next month “to provide executive management
leadership for our excellent workforce headed by two highly experienced people, one
of whom has recently transferred there from Australia.
“We are rapidly building a mid-sized copper and gold company in Chile, the world’s
largest copper producing nation, based on our established operations, good mineral
resources and our experienced senior management team,” he said.
“We plan to treble our metal production over two years, and substantially increase
our net cashflows. Beyond 2007, we have opportunities to grow further, based on
further resource definition, exploration potential and good value acquisitions.
“SMC is in a strong financial position, with cashflow funding expansion without
planned recourse to the shareholders or the market.”
Mr Kidd said that the current expansion was expected to be completed next month
and comprised:
· Cinabrio copper mine output increasing from 1100 to 1400 tonnes of ore per
day
· Tensionales gold mine increasing from 40 to 100 tonnes of ore per day
· Dalmacia copper mine commencing production from September at 200
tonnes of ore per day
· Punitaqui processing plant throughput increasing from 900 to 1500 tonnes of
ore per day, with plant improvements to increase recovery rates from 62% to
80% and copper concentrate grade from 24% to 30%.
The second stage expansion will comprise:
· Further doubling of Punitaqui processing plant throughput to 3000 tonnes of
ore per day by 2007
· Increasing mine production at Cinabrio and Tensionales and new mines at
Dalmacia, Diatrema and Farellon to lift both copper and gold output
Copper production is planned to increase from an estimated 4,000 tonnes in calendar
2005, to 6,600 tonnes in 2006 to 13,000 tonnes in 2007.
Gold production is planned to increase from an estimated 2,000 oz in 2005, to 3,400
oz in 2006 to 6,600 oz in 2007. However, the company is confident that it can exceed
these estimates for gold production.
A further expansion will follow if the company is able to prove up sufficient ore to
justify an SX/EW plant to treat copper oxide ores.
Current mineral resources are estimated to total the equivalent of 2 million oz of gold
or 317,000 tonnes of copper. Exploration potential is estimated at a further 2 to 3
million oz of gold equivalent.
Mr Kidd said that a current dispute with the previous owner was over delivery of
various assets which SMC claimed ought to have been acquired in Chile as part of its
purchase contract and would have no impact on SMC’s ownership of the tenements.
An Australian court has issued an injunction preventing the previous owner from
selling 17 million shares and SMC has withheld a scheduled payment of US$1.75
million to the previous owner. Negotiations with the previous owner are proceeding.
SMO
smc gold limited
