Australian Solomons Gold Limited announces feasibility study results on the Gold Ridge Project



    /THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR
    FOR DISSEMINATION IN THE UNITED STATES/

    BRISBANE, Australia, April 16 /CNW/ - Australian Solomons Gold Limited
(TSX:SGA) ("ASG" or "the Company") today announced the results from the
Feasibility Study ("Study") on the Company's 100% owned Gold Ridge Project
located on Guadalcanal in the Solomon Islands. The Study is for the
redevelopment of the Gold Ridge mine which operated for 22 months from
August 1998 until June 2000, during which time it produced approximately
210,000 ounces gold, from one of the four identified mineralised zones at the
property. An ongoing drilling program is in place aiming to increase the
project's resources.
    The existing mine is fully permitted with existing process plant and
infrastructure including a diesel fuelled power station located at the plant
site and a tailing storage facility (TSF).

    Highlights of the Feasibility Study

    Assumptions used in the economic model include a gold price of US$650 per
ounce; however, the Mineral Reserve estimates have been calculated using the
more conservative gold price of US$550, for the purposes of obtaining
potential project debt with resource lenders. As is noted elsewhere in this
release, these Study results assume reliance on 100% diesel power from the
power station located at site, although work is continuing into the potential
use of alternative lower cost fuel for approx. 50% of the project power
requirements.

    Highlights of the Feasibility Study are summarised in Table 1.

    
    Table 1 - Gold Ridge Feasibility Study - Base Case Highlights

    -------------------------------------------------------------------
    Mineral Reserve (Probable)              1.15 million ounces
    -------------------------------------------------------------------
    Metallurgical Recovery                  82%
    -------------------------------------------------------------------
    Mine Throughput                         2.5Mtpa
    -------------------------------------------------------------------
    Mine Life                               7 years
    -------------------------------------------------------------------
    Production Schedule                     2.5 Mtpa at 1.9g/t average
                                            870,000 ounces recovered
    -------------------------------------------------------------------
    Average Annual Production:
    - Years 1 to 3                          136,000 ounces gold
    - Life of Mine                          124,000 ounces gold
    -------------------------------------------------------------------
    Cash operating costs(*):
    - Years 1 to 3                          US$344 per ounce
    - Life of Mine                          US$388 per ounce
    -------------------------------------------------------------------
    Internal Rate of Return:
    - Pre-tax                               27.6%
    - After-tax                             20.6%
    -------------------------------------------------------------------
    Payback Period:
    - Pre-tax                               3.3 years
    - After-tax                             4.3 years
    -------------------------------------------------------------------
    Pre-production capital(xx)              US$72.0 million
    -------------------------------------------------------------------
    (*)  Cash operating costs include all mining, processing and
         administration costs, but exclude royalties (3% of gross revenue),
         sustaining capital, leasing of mine equipment, and mine closure
         costs.

    (xx) Pre-production capital includes allowances of US$5.3 million for
         price and scope accuracy provisions and US$3 million for project
         contingencies.


    Pre-Production Capital Costs

    The pre-production capital cost to redevelop the Gold Ridge Project has
been estimated at US$72 million, estimated in October 2006 dollars, excluding
the new mining fleet (which will be leased), but including project
contingency.

    Table 2 - Gold Ridge Pre-Production Capital Cost Summary

    -------------------------------------------------------------------
    Description                                     Costs as estimated
                                                      in US$ million
    -------------------------------------------------------------------
    Process Plant Facilities                               24.3
    -------------------------------------------------------------------
    Services                                               11.6
    -------------------------------------------------------------------
    Mining facilities                                       1.7
    -------------------------------------------------------------------
    Site infrastructure facilities                          4.1
    -------------------------------------------------------------------
    Off-site infrastructure facilities                      1.1
    -------------------------------------------------------------------
    Indirect costs(1)                                      13.5
    -------------------------------------------------------------------
    Owner's Costs(2)                                        9.7
    -------------------------------------------------------------------
    Total Plant and Infrastructure Costs(3)               $66.0
    -------------------------------------------------------------------
    Pre-production mining capital, including
     pre-stripping Namachamata, and haul roads              6.0
    -------------------------------------------------------------------
    Total Pre-production Capital Cost(4)                  $72.0
    -------------------------------------------------------------------
    Notes:
    (1) Indirect Costs above include US$8.7 million for third party
        engineering, procurement and construction management.
    (2) Owner's costs include first fill items of US$3.7 million and general
        project contingency of US$3 million
    (3) The Total Plant and Infrastructure Cost amount includes a price and
        scope accuracy provision of US$5.3 million.


    Operating Costs

    Processing and Administration costs have been estimated by the Study
Manager, Ausenco, including input by ASG management for some administration
estimates and labour costs. Mining costs have been calculated by IMC.
Processing costs are expressed in June 2006 constant US dollars with no
allowance for escalation.

    Table 3.1 - Gold Ridge Operating Costs Summary - Life of Mine

    -------------------------------------------------------------------
    Cost Area                             US$/dry tonne
                                               milled
    -------------------------------------------------------------------
    Open pit mining(*)                          $4.82          25%
    -------------------------------------------------------------------
    Processing costs                           $12.19          63%
    -------------------------------------------------------------------
    Administration (G&A)                        $2.43          12%
    -------------------------------------------------------------------
    Total Operating Costs                      $19.45         100%
    -------------------------------------------------------------------
    (*) Excludes cost of leasing mining fleet.


    Table 3.2 - Gold Ridge Operating Costs - per ounce produced

    -------------------------------------------------------------------
                                                US$/ounce produced
    -------------------------------------------------------------------
    First 3 Years average                               $344
    -------------------------------------------------------------------
    Life of Mine average                                $388
    -------------------------------------------------------------------
    


    Financial Evaluation

    ASG has prepared the financial analysis for the Study. The economic model
assumes a gold price of US$650 per ounce notwithstanding the Mineral Reserve
has been calculated using a US$550 gold price, for the purposes of obtaining
potential project debt with resource lenders. Project construction capital
costs as set out in Table 2 above, ongoing sustaining capital, mine equipment
leasing, and mine closure costs have all been included in the economic model.
Solomon Island corporate income tax rate of 35% has been used to calculate tax
payments. The Gold Ridge Project has an agreed capital deduction provision
whereby all pre-production capital costs are immediately deductible in the
year incurred and any losses resulting may be carried forward to the following
tax year.

    
    Table 4 - Gold Ridge - Base Case Financial Analysis Summary

    -------------------------------------------------------------------
    Project Data                                  Study Outcomes
    -------------------------------------------------------------------
    Life of Mine                                     7 Years
    -------------------------------------------------------------------
    Total Gold produced                              870,000
    -------------------------------------------------------------------
    Total Ore mined                                   17.3Mt
    -------------------------------------------------------------------
    Total Waste mined                                 27.5Mt
    -------------------------------------------------------------------
    Waste to Ore strip ratio                          1.55:1
    -------------------------------------------------------------------
    Average gold grade to the mill                   1.90g/t
    -------------------------------------------------------------------
    Average plant gold recovery                          82%
    -------------------------------------------------------------------
    Base Case Gold price                              US$650
    -------------------------------------------------------------------
    Average cash operating cost (per ounce)(*)          $388
    -------------------------------------------------------------------
    Pre-production capital costs
     (including contingency)                         US$72.0M
    -------------------------------------------------------------------
    Sustaining capital costs
     (including TSF expansion)                       US$13.2M
    -------------------------------------------------------------------
    Pre-tax Cashflow (undiscounted)                 US$102.3M
    -------------------------------------------------------------------
    After-tax net cashflow discounted at 0%          US$57.9M
    After-tax net cashflow discounted at 3%          US$44.7M
    -------------------------------------------------------------------
    Pre-tax Internal Rate of Return                    27.7%
    After-tax Internal Rate of Return                  20.7%
    -------------------------------------------------------------------
    Payback Period (pre-tax)                        3.3 years
    Payback Period (after tax)                      4.3 years
    -------------------------------------------------------------------
    (*) Cash operating costs include all mining, processing and
        administration costs, but exclude royalties (3% of gross revenue),
        sustaining capital, leasing of mine equipment, and mine closure
        costs.

    Sensitivity Analysis

    ASG has prepared a number of sensitivities to basic assumptions including
costs and revenue items, summarised in Table 5.

    Table 5 - Gold Ridge Sensitivity Analysis Summary

    -------------------------------------------------------------------------
    Project Data   Variation   Pre-Tax   After-Tax    After-tax    After-tax
                     (US$)      IRR %       IRR %      NPV @     NPV @
                                                     0% (US$M's)  3% (US$M's)
    -------------------------------------------------------------------------
    Gold Price
    + 10%            $715       39.8%       30.4%       $87.9       $71.4
    Base Case        $650       27.7%       20.7%       $57.9       $44.7
    -------------------------------------------------------------------------
    Cash Operating
    Costs (US$/oz.)
    Base Case        $388       27.7%       20.7%       $57.9       $44.7
    - 10%            $349       34.9%       26.6%       $77.1       $61.6
    -------------------------------------------------------------------------
    Pre-production
    Capital
    Base Case        $72M       27.7%       20.7%       $57.9       $44.7
    - 10%            $65M       31.4%       23.4%       $60.4       $47.5
    -------------------------------------------------------------------------
    

    Opportunities

    Feasibility Study projects generally include both risks and
opportunities. Risk factors are noted in the forward looking statement and
have been considered in all aspects of the Study. However ASG believes
opportunities remain to potentially enhance the Gold Ridge Project which
include:

    
    -   The Mineral Reserve estimates are noted as being calculated at the
        conservative gold price of US$550 per ounce. The use of a more
        current gold price would increase the number of ounces available to
        the economic model used.

    -   The Mineral Reserve estimate assumes previously estimated process
        costs of US$14.93 per dry tonne of ore as the average plant operating
        cost including labour reagents, maintenance and power, and is noted
        as being higher than the final Study life of mine average processing
        costs of US$12.19 per dry tonne. Using the reduced processing costs
        will result in additional ounces being returned to the economic model
        used.

    -   The Base Case assumes 100% reliance upon diesel fuelled power
        station. Alternative fuels such as biomass and/or hydro are potential
        sources of power and are currently at various stages of review. The
        Company estimates up to 50% of power requirements could be sourced
        from the alternative energy sources once the relevant studies are
        completed.

    -   Cyanide destruction assumes use of the Inco system, a well known and
        developed system. ASG has initiated vendor testwork on alternative
        systems that may reduce operating costs of the cyanide destruction
        circuit.

    -   There has been limited exploration work carried out at Gold Ridge and
        the Company has only recently commenced drilling for the purposes of
        testing further mineralisation identified in and around the current
        pit boundaries. This drilling will continue and has the potential to
        increase the mineral resource.
    

    Mineral Resource Estimates for Feasibility Study

    The Feasibility Study is based on a Mineral Resource Estimate prepared by
Hellman & Schofield located in Brisbane, Australia. The historic mineral
resource estimate was last prepared by Delta Gold Limited in June 2000 to the
Australian JORC standards, and before the introduction of the Canadian NI
43-101 standard.
    The new Mineral Resource Estimate was prepared using Multiple Indicator
Kriging (MIK) for resource estimation. This requires the detailed analysis of
gold assay data as well as detailed analysis and modelling of the spatial
continuity of gold grades. A detailed description of MIK appears in the text
of the Feasibility Report
    Mineral Resource Estimates of gold were determined and reported at a
number of different cut-off grades, and are presented in Table 6.

    
    Table 6 - Mineral Resource Estimate

    Valehaichichi (remaining 'in-situ') Resource Estimates
    ---------------------------------------------------------------
                    Measured         Indicated         Total M&I
    ---------------------------------------------------------------
      Cut-off     Mt      g/t       Mt      g/t       Mt      g/t
    Grade (g/t)
    ---------------------------------------------------------------
        0.5      1.55     1.45     9.21     1.10    10.76     1.15
    ---------------------------------------------------------------
        0.6      1.40     1.55     7.50     1.23     8.90     1.28
    ---------------------------------------------------------------
        0.7      1.27     1.64     6.19     1.35     7.46     1.40
    ---------------------------------------------------------------
        0.8      1.16     1.73     5.14     1.48     6.30     1.52
    ---------------------------------------------------------------

    Namachamata Resource Estimates
    ---------------------------------------------------------------
                    Measured         Indicated         Total M&I
    ---------------------------------------------------------------
      Cut-off     Mt      g/t       Mt      g/t       Mt      g/t
    Grade (g/t)
    ---------------------------------------------------------------
        0.5      1.12     1.96     1.32     1.43     2.44     1.67
    ---------------------------------------------------------------
        0.6      1.02     2.10     1.10     1.60     2.12     1.84
    ---------------------------------------------------------------
        0.7      0.94     2.22     0.94     1.76     1.89     1.99
    ---------------------------------------------------------------
        0.8      0.87     2.33     0.82     1.91     1.70     2.13
    ---------------------------------------------------------------

    Kupers Estimates
    ---------------------------------------------------------------
                    Measured         Indicated         Total M&I
    ---------------------------------------------------------------
      Cut-off     Mt      g/t       Mt      g/t       Mt      g/t
    Grade (g/t)
    ---------------------------------------------------------------
        0.5      3.74     1.54    10.58     1.25     14.33    1.33
    ---------------------------------------------------------------
        0.6      3.40     1.64     8.88     1.39     12.28    1.46
    ---------------------------------------------------------------
        0.7      3.04     1.76     7.48     1.53     10.52    1.59
    ---------------------------------------------------------------
        0.8      2.71     1.89     6.34     1.67      9.05    1.73
    ---------------------------------------------------------------

    Dawsons Estimates
    ---------------------------------------------------------------
                    Measured         Indicated         Total M&I
    ---------------------------------------------------------------
      Cut-off     Mt      g/t       Mt      g/t       Mt      g/t
    Grade (g/t)
    ---------------------------------------------------------------
        0.5      1.09     1.40     17.91    1.27     19.00    1.28
    ---------------------------------------------------------------
        0.6      0.96     1.52     14.91    1.42     15.87    1.43
    ---------------------------------------------------------------
        0.7      0.82     1.67     12.36    1.58     13.18    1.58
    ---------------------------------------------------------------
        0.8      0.69     1.84     10.26    1.75     10.95    1.75
    ---------------------------------------------------------------

    Total Resource Estimates
    ---------------------------------------------------------------
                    Measured         Indicated         Total M&I
    ---------------------------------------------------------------
      Cut-off     Mt      g/t       Mt      g/t       Mt      g/t
    Grade (g/t)
    ---------------------------------------------------------------
        0.5      7.51     1.57     39.02    1.23     46.53    1.29
    ---------------------------------------------------------------
        0.6      6.78     1.68     32.39    1.37     39.17    1.42
    ---------------------------------------------------------------
        0.7      6.07     1.79     26.97    1.52     33.05    1.57
    ---------------------------------------------------------------
        0.8      5.43     1.92     22.56    1.67     27.99    1.72
    ---------------------------------------------------------------
    

    For the purposes of the Feasibility Study the 0.8 g/t cut-off grade was
used. Accordingly the above tables highlight these results (shaded text).
    In addition to the above Mineral Resource Estimate (Measured &
Indicated), an Inferred Resource of 7.95Mt at 1.78g/t is estimated.

    Mineral Reserve Estimate

    The operations will be based on conventional open pit mining. Mine plans
have been developed by IMC of Brisbane, Australia on the basis of optimised
pit shells using a standard Lerchs Grossman methodology in Whittle Software.

    
    Table 7 - Pit Optimisation Criteria

    ---------------------------------------------------------------
    Parameters                                 Unit      Quantity
    ---------------------------------------------------------------
    Gold Price                               US$/oz.       550
    ---------------------------------------------------------------
    Mining costs (ore and waste)             US$/dmt      1.60
    ---------------------------------------------------------------
    Processing costs                         US$/dmt     14.93
    ---------------------------------------------------------------
    Mining Recovery                             %          95%
    ---------------------------------------------------------------
    Overall pit slope (incl. ramps)          Degrees      47.5
    ---------------------------------------------------------------
    Discount rate                               %           10
    ---------------------------------------------------------------
    Mill throughput                         Mtpa (dry)     2.5
    ---------------------------------------------------------------
    Note:  The assumed process cost of US$14.93 per dry tonne of ore is a
           previously estimated average plant operating cost including labour
           reagents, maintenance and power, and is noted as being higher than
           the final Study life of mine average processing costs of
           US$12.19 per dry tonne.
    

    The key parameters used for the optimisation and the development of final
pits are shown in Table 7. The recovery is estimated based on pit and material
type (see Metallurgy below), while the mining and process costs are fixed. The
assumed process cost of US$14.93 per dry tonne of ore is a previously
estimated average plant operating cost including labour reagents, maintenance
and power, and is noted as being higher than the final Study life of mine
processing costs of US$12.19 per dry tonne. Power is based on 100% diesel
generation. Reducing the cost of power through either hydro generation or
biomass is being investigated and holds future potential to significantly
reduce operating costs, albeit there will be additional capital costs
associated with generating alternative energy. However, lower energy/operating
costs potentially allow for an increase in the reserve base of the mine.
    The Mineral Reserve is based on detailed pit designs that target the
material outlined in the optimised pit shell with specific pit slopes applied
to each deposit area and access roads developed within each pit.
    Actual overall pit slope design ranges from a minimum of around 40
degrees to a maximum of around 54 degrees including face batters, safety berms
and ramps.
    The Mineral Reserve has been classed as Probable. These Mineral Reserves
represent the Measured and Indicated resources contained within the economic
pits designed by IMC that are above a 0.8g/t cut-off grade.
    The total Probable Mineral Reserve at Gold Ridge is approximately 19.6 Mt
at a 1.82g/t Au in-situ, as shown in Table 8. The Reserves have been prepared
to NI 43-101 standards by IMC.

    
    Table 8 - Gold Ridge Mineral Reserve

    -------------------------------------------------------------------------
    Reserve Classification    Waste     Ore      Au (g/t)  Au (g/t)  In-situ
                                Mt    Probable   In-situ  Recovered   Metal
                                         Mt                           K oz..
    -------------------------------------------------------------------------
    Valehaichichi              4.56      3.55      1.65      1.23     187.8
    -------------------------------------------------------------------------
    Namachamata                2.04     1.355      2.21      1.57      96.4
    -------------------------------------------------------------------------
    Kupers                    11.15      6.57      1.83      1.51     386.2
    -------------------------------------------------------------------------
    Dawsons                   12.59      8.09      1.84      1.60     477.4
    -------------------------------------------------------------------------
    Total                     30.35     19.56      1.82      1.50   1,147.8
    -------------------------------------------------------------------------
    

    Open Pit Mining

    Gold Ridge will be a truck and shovel operation utilising 2 x 110t
hydraulic excavators in backhoe configuration loading a maximum fleet size of
14 x 46t all wheel drive articulated dump trucks. This primary excavation
fleet is supported by track dozers, graders, wheel loaders, water carts, and
other ancillary plant.
    Final bench heights will be 9m and these will be mined in four flitches
after blasting. Allowance has been made for blasting of 75% of all ore and
waste requiring a 2 x 150mm blast hole drills and peak explosive consumption
of 1700 tpa based on a powder factor of 0.25 kg/t.
    Reverse circulation drilling on a 12.5m x 12.5m pattern will be used for
grade control. The use of engineers/geologists for grade control planning in
conjunction with technicians at the mining face will be a key requirement to
ensure appropriate levels of mining selectivity are achieved.
    Haul road construction will generally be in cut to minimise wash although
limited sections of road may need to be constructed in fill due to the steep
terrain. Competent road construction material has been identified on site.

    Metallurgy

    To confirm metallurgical recoveries, testwork samples were composited
from the PQ diamond drill core from the four deposits. A total of 103 holes
were available from the 2005/2006 drilling programs. During core logging, the
intersections were classified as oxide, transition and fresh with an oxide
intersection interpreted as having highly weathered country rock and no
visible sulphides and the fresh ore intersections were interpreted as having
no, or limited, weathering of country rock due to surface oxidation, and
having fresh (unoxidised) sulphides present.
    Composites were chosen to give a range of gold assays and an associated
range of arsenic assays. Some high gold grade and low gold grade composites
were selected for assessment as it was considered important to understand the
response of these levels of gold to cyanidation.
    Gravity-leach testwork was carried out at Ammtec on the selected
composites from the four deposits. The testwork parameters were based on the
previous, 2005 testwork procedures, which were in turn, based generally on the
previous Ross Mining testwork and the plant operating parameters over the 22
months of operations.
    The 2006 testwork composites were chosen to give a range of gold and
arsenic assays for each ore type classified, and were specifically chosen to
represent the range of gold and arsenic grades expected in ore to be treated.
    IMC developed a spatial distribution of arsenic within each pit outline
using data from those drill holes assayed for arsenic (approximately 10% of
the total). Gold recovery to arsenic grade relationships for each ore type,
developed from the metallurgical testwork, were used to estimate the gold
recoveries for the mining model. The estimated gold recoveries, summarised in
Table 9, were utilised to establish the feasibility outcomes.

    
    Table 9 - Gold Ridge Estimated Gold Recovery Summary

    ---------------------------------------------------------------
    Deposit                  Oxide   Transition     Primary
                              Ore         Ore         Ore
    ---------------------------------------------------------------
    Valehaichichi             90%         73%         73%
    ---------------------------------------------------------------
    Namachamata               91%         68%         68%
    ---------------------------------------------------------------
    Kupers                    89%         81%         81%
    ---------------------------------------------------------------
    Dawsons                   95%         85%         85%
    ---------------------------------------------------------------
    

    Process

    The processing plant will be run 365 days per year at the increased rate
of 2.5Mtpa (6,850tpd). Overall recovery of gold from ore mined is forecast at
82% based on the modelling described above.
    The ore will be fed through a primary jaw crusher to a single stage SAG
mill in closed circuit with cyclones. Significant coarse gold occurs in the
Gold Ridge ore and bulk gravity recovery of a bleed from cyclone underflow
followed by a two stage gravity circuit is included in the existing
facilities. The gravity circuit is expected to recover approximately 25% of
the gold recovered based on the metallurgical testwork undertaken as part of
the Study.
    The plant is a conventional CIL circuit comprised of ten tanks in two
trains. The desorption circuit is a hot water elution circuit designed for the
treatment of a 6 t carbon batch size.
    The eluate is electrowon onto steel wool cathodes, which are calcined,
prior to smelting to produce doré bullion. The gravity concentrate is smelted
separately.
    CIL tails are thickened and pumped to a cyanide detoxification circuit
before discharge to the TSF. Decant water from the TSF is returned to the
process plant.

    Infrastructure

    The Gold Ridge Project has considerable infrastructure remaining from the
previous operations, although major refurbishment is required to most of the
plant and equipment at site.
    A regional office has been established in the Ranadi business area of
Honiara. This has a significant workshop and an area for sample preparation
and drill core storage. It is intended that this facility be maintained for
administration functions servicing the mine operation. Light vehicle servicing
will also be carried out there for the mining operation.
    Mine site infrastructure includes workshops and warehouse (recently
reclad), water supply, power generators and building (recently reclad), road
access, tailings storage facility (TSF), and an on-site camp for 150 people
(currently being refurbished).

    Environmental and Permitting

    The Gold Ridge Project was fully permitted and operated for 22 months
until its closure in June 2000. As part of the project acquisition by ASG, the
Solomon Island government agreed to hold all permits in suspension pending
recommencement of operations. Accordingly the Company will commence operations
under the same permits and approvals as were originally granted, including a
Mining Lease that still has 22 years to run and with a further 10 year
extension available. ASG also has a Special Prospecting Licence surrounding
the Mining Lease.
    The Gold Ridge Project has an existing TSF. Once the water currently
captured is discharged, the TSF will have sufficient capacity for
approximately 4 years' operation. The cost of expansion, to provide sufficient
capacity for over 7 years' operation is allowed for in the estimate of
sustaining capital. The geotechnical stability of the TSF has been
independently assessed by Golder Associates and remains stable in all aspects.
    The Company has also reviewed the socio-economic aspects of the effects
on local communities caused by the re-commencement of operations. The previous
operators of the project had agreements with the Landowner Groups and these
agreements remain valid. Further supplementary agreements were signed in May
2006 which recognise the original agreements and cover issues such as
compensation and relocation.
    The agreements also provide for a program of ongoing assistance in the
provision of social and community infrastructure over the next five years.
Local employment and small business development also feature in the agreements
with Landowners. The Landowners are interested and participating stakeholders
in the redevelopment of Gold Ridge, including their royalty interest of 1.2%
of gold revenue derived from the mining operations. The Provincial government
also receives a royalty of 0.3%.

    Construction Schedule

    The redevelopment of the Gold Ridge mine comprises three discrete
activities of refurbishment and/or replacement of the equipment and material
of the existing 2Mtpa process plant, construction of the additional tankage
and equipment to increase throughput to 2.5Mtpa and implement cyanide
detoxification, and development of haul roads and pre-strip for the mining
operations.
    These activities will be managed on behalf of ASG by a specialist EPCM
contractor who will subcontract significant portions of the works to
expatriate construction companies due to a lack of existing skills in the
Solomon Islands.
    Haul road development will be commenced by a contracting company to
enable the sequenced delivery of mining equipment and required operator
training to enable ASG to perform these activities during operations.
    As all traditional "long lead" time equipment (mill etc) are already in
place, the critical path for development of Gold Ridge comprises the
sequencing of the general construction activities and based on a commencement
date of July 2007, the Company estimates production can begin in Q2/2008.

    Exploration Drilling

    To date, the Company has drilled 3 exploration holes in Charivunga Gorge
which runs in a NE - SW direction and separates Valehaichichi and Namachamata
from Kupers and Dawsons pits. The Gorge has been identified from previous work
as the surface expression of a major structural feature and could be the focus
of the Gold Ridge hydrothermal system. The terrain in the Gorge area is
extremely steep and the previous and currently planned drill sites are
governed by accessibility rather than a set drill pattern. Holes DDH032 and
DDH033 drilled in 2006 were located towards the SW end of the Gorge. The
recently completed Hole DDH120, located 400m to the NE of Hole DDH032,
confirms the presence of a large hydrothermal, gold mineralised system
possibly extending the entire length of the Gorge. All three holes have
intersected wide zones of gold mineralisation which remain open along strike
and at depth.
    The current drilling program includes a further 2 exploration holes
located in the middle section of the Gorge between DDH032 and DDH120.

    Qualified Persons

    The Study was managed by Ausenco Limited ("Ausenco"), an international
engineering firm and includes specialist input from Hellman & Schofield Pty
Ltd ("Hellman & Schofield") with respect to the geological resource estimate,
IMC Consultants Pty Ltd ("IMC") with respect to mine planning, scheduling and
costing, including the Estimation of Mining Reserve, and Golder Associates Pty
Ltd ("Golder Associates") for all environmental, geotechnical and hydrological
aspects of the project. Ausenco completed the process and metallurgical work,
and estimates of capital and operating costs for the Study were completed by
Ausenco, IMC, Golder and ASG for their respective scopes. The Study has been
prepared in accordance with the Standards of Disclosure for Mineral Properties
as defined by Canadian Securities Administrators National Instrument 43-101
(NI 43-101).
    The technical information contained in this press release has been
compiled from reports by those independent qualified persons, as defined by
NI 43-101 Standards of Disclosure for Mineral Projects, responsible for the
estimations contained in the feasibility study prepared on the Gold Ridge
Project and to be filed on the SEDAR system (www.sedar.com) within 45 days of
this release. The respective qualified persons are stated as follows:

    
    1.  For Ausenco Limited, with respect to the Coordinating Author of the
        feasibility study and with regard to Infrastructure, Process Plant,
        Capital Cost Estimate and Construction Schedule the qualified person
        is Alistair Barton FDipGeol. FAusIMM CP(Geol); with respect to
        Metallurgy, Process Design, and Operating Cost Estimate the qualified
        person is Eddie McLean BSc (Metallurgy) MAusIMM.

    2.  For Hellman & Schofield, with regard to Resource Estimates, the
        qualified person is Dr William J A Yeo PhD MAusIMM

    3.  For IMC Consultants Pty Ltd, with regard to the Mineral Reserve
        Estimate, mine planning and mining costs (capital and operating), the
        qualified person is Gary Benson BE (Mining) MAusIMM

    4.  For Golder Associates Pty Ltd, with regard to environmental matters,
        the qualified person is Marshall Lee BSc MAusIMM MQELA; with regard
        to the tailings storage facility and geotechnical issues, the
        qualified person is Mike Gowan MSc, RPEQ, PrEng.
    

    Tony Field, BSc, Grad Dip Env Sc, MAusIMM, MSPE, Exploration Manager,
Australian Solomons Gold Limited, is the qualified person responsible for
exploration at the Gold Ridge Project and the technical information contained
in the Exploration Drilling section of this press release.
    A copy of the NI 43-101 Feasibility Study Report will be filed on SEDAR
(www.sedar.com) within the prescribed period of 45 days of this announcement.

    Company Comment

    "The Feasibility Study provides detailed confirmation of the quality and
economic viability of the Gold Ridge Project," said Ron Douglas, President and
CEO, Australian Solomons Gold. "Our view is that, had it not been for the
tensions on the island, Gold Ridge would have been in continuous production
and the project's resource would have been better understood by now. Armed
with the study and with order restored on Guadalcanal, we intend now to
proceed to the financing and construction stages to put this exciting project
back into the mainstream."

    Cautionary Statement Regarding Forward-Looking Information

    All statements, trend analysis and other information contained in this
press release relative to markets for ASG's trends in resources, recoveries,
production and anticipated expense levels, as well as other statements about
anticipated future events or results constitute forward-looking statements.
Forward-looking statements are often, but not always, identified by the use of
words such as "seek", "anticipate", "believe", "plan", "estimate", "expect"
and "intend" and statements that an event or result "may", "will", "should",
"could" or "might" occur or be achieved and other similar expressions.
Forward-looking statements are subject to business and economic risks and
uncertainties and other factors that could cause actual results of operations
to differ materially from those contained in the forward-looking statements.
Forward-looking statements are based on estimates and opinions of management
at the date the statements are made. Some of these risks, uncertainties and
other factors are described under the heading "Risk Factors" in the Company's
annual information form available on www.sedar.com. ASG does not undertake any
obligation to update forward-looking statements even if circumstances or
management's estimates or opinions should change. Investors should not place
undue reliance on forward-looking statements.

    The Toronto Stock Exchange has neither approved nor disapproved the
    contents of this press release.

    Additional information is available on www.sedar.com and at the Company
website at www.solomonsgold.com.au.





For further information:

For further information: ASG: Ron Douglas, CEO, (617) 3624 9003
(office), or cell (61) 434 679 082, ron.douglas@solomonsgold.com.au; Please
note that the Head Office of ASG is located in Queensland, Australia and is 14
hours ahead of Toronto time; Investor Relations: Martti Kangas, (416) 815-0700
x 243, mkangas@equicomgroup.com; Michael Joyner, (416) 815-0700 x 275,
mjoyner@equicomgroup.com, The Equicom Group, Toronto, Canada

Organization Profile

AUSTRALIAN SOLOMONS GOLD LIMITED

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