/NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR RELEASE TO US NEWS WIRE SERVICES/
CGA ANNOUNCES SEPTEMBER QUARTERLY REPORT
ANNOUNCEMENT TO THE TORONTO STOCK EXCHANGE AND AUSTRALIAN SECURITIES EXCHANGE
30 OCTOBER 2012
PERTH, Western Australia, Oct. 30, 2012 /CNW/ -
MASBATE GOLD PROJECT UPDATE
| Ore Mine
The process plant throughput was 6% above budget at 1,702,574 tonnes at 1.04g/t (June Qtr 1,728,751 tonnes at 1.05g/t). The process plant continues to operate in a steady state and above expectations.
Gold production was 47,646 oz (June Qtr 50,817oz) at a recovery of 83.3% (June Qtr 83.3%).
Plant availability remained good at 93.8% (June Qtr 93.4%) with all areas of the plant performing well. The SAG mill continued to operate trouble free since recommissioning on 25 December with average throughput rates for the quarter of 6.8mtpa.
Cash costs rose slightly to $837/oz (June Qtr $784/oz). This is mainly attributable to reduced gold production and accounting adjustments.
Cash costs per tonne milled were $23.41 compared to $22.76 in the June quarter and were mainly impacted by increased accounting adjustments related to deferred mining. The unadjusted cost per tonne mill actually fell to $22.12 from the March quarter of $22.40.
The gross project operating cash flow before working capital for the quarter was US$23.640M (June Qtr US$28.758M) from gross gold proceeds of sale of US$58.035M.
There was one Lost Time Injury in the quarter when a contractor working on a mill reline injured his finger. At the end of the quarter the site had achieved 83 days without a lost time injury and an LTI Frequency rate of 0.17.
Mining and Geology
Mine production increased 5% to 2,492,527 BCM (June Qtr 2,370,565 BCM) to produce 1,598,297 tonnes of ore (June Qtr 1,599,837 tonnes) from Colorado, Binstar, HMB East and Main Vein pits. Main Vein and Colorado pits continued to be the main production areas producing a mix of oxide and transitional ore for the plant.
The Lycopodium Optimisation Study has identified a number of options for upgrading plant capacity via stepped increases in capital expenditure and in light of the announced proposed merger with B2Gold, discussions on the various options are being conducted with B2Gold.
Exploration and Near Mine Resource Drilling Summary
Drilling this quarter was split between resource infill and step out work within the mining area on both Filminera Resources and Vicar Mining leases; drilling along strike into the EP10 exploration lease and initial drilling of six holes into a series of geophysical targets at the Baleno gold-copper porphyry prospect. Drilling totalled 5,834.9m of reverse circulation, 12,138.4m of diamond core and 3,448.3m of RC / core tail.
The best results for the quarter were returned from Libra East where infill drilling has extended the mineralisation below the planned pit floor. HMBNW and Main Vein North Split and Blue Quartz North holes also returned encouraging results.
The contract regional mapping and sampling crew completed the mapping program within the Vicar Mining Properties near Pajo Hill and demobilised during the quarter. Their mapping has indicated an extension to the Grandview structure within the Vicar Mining lease, west of the Pajo Hill Prospect.
At the Baleno gold-copper porphyry prospect, drilling was completed during the quarter. Further ground work is anticipated including soil geochemical sampling program in the near future.
Drilling Statistics for September Quarter 2012
|Locations||RC||RC / Diamond Tail||Diamond|
Drilling at Blue Quartz continued on the untested "North Splay" with 4 diamond holes for 886.3m completed. The program was suspended late in the quarter when Drill Corp Rig 15 required an engine swap. More encouraging results were received during the period from North Splay holes BQRC064 to BQRC093. Better results include (true widths) 14m @ 2.70g/t Au, 17m @ 1.51g/t Au, [email protected] 1.45g/t Au, 13m @ 1.07g/t Au and 23m @ 1.30g/t Au. More infill holes have been planned and drilling will start as soon as a rig is available. Infill holes to test for depth extensions of the Blue Quartz main zone have been completed and samples processed for assay during the quarter. Pads have been prepared for holes planned to test the Blue Quartz NE IP anomaly with drilling to commence once rigs become available from other programs.
Main Vein North Split diamond core drilling continued this quarter with 13 holes completed (3,863m). Drilling was completed on the structurally complex western end of the Doris vein where it converges with the Libra East Vein. Drilling along the western extent of North Split has encountered wide zones of quartz mineralisation that extend to at least 200 metres below the floor of the current pit design. The ore zones taper off at depth however maintain a very wide thickness (around 45 metres) down to around 170 metres below the pit floor.
The main structure which contains the bulk of the mineralisation is interpreted to be a continuation of the Doris Vein. A lesser substructure to the south of Doris has been identified with locally some very high grades within it. There are also continuations of other structures to the north of the Doris vein, however these are thinner. Better intersections include (true widths); 17m @ 1.20g/t Au, 15m @ 3 .84g/t Au, [email protected] 1.01g/t Au, [email protected] 3.02g/t Au, 47m @ 1.44g/t Au, 15m @ 1.21g/t Au and 16m @ 1.10g/t Au.
Drilling at Libra East was completed during the quarter with LERC073 terminating at 466m. Results received to date confirm the presence of a consistent, wide, high grade vein system extending over 500m strike. All of the holes reported in the month are resource conversion holes and lie within the current pit design. They confirm the existing interpretation of a wide gold-bearing mineralised zone. LERC066 lies below the current pit design within the newly defined extension to the west along the main Libra East trend. After the new block model is delivered, any significant inferred resource remaining will be targeted for further drilling if necessary.
All results from the 11 holes drilled at Libra West have been received. Results indicate good grades but moderately thin intersections. All holes in this program are below the floor of the current pit design and may form part of a new mineable zone after the new block model update becomes available. It is likely that additional shallower level holes will be required as a follow up to this program. Better results from this zone include 4m @ 4.97g/t Au, 7m @ 2.90g/t Au, 6m @ 2.69g/t Au, [email protected] 1.81g/t Au and 9m @ 2.30g/t Au.
All HMB North West Holes returned in the quarter intersected the main HMB North West structure below the floor of the current pit design. Holes in this program show the width and grade varies significantly along the strike of the structure at depth. A further program of drill holes has been planned at HMB North West to convert likely inferred material. This program comprises 19 holes for 3,350 metres, planned for the next quarter.
At Colorado the current drilling program is designed to infill previous wide spaced drilling, particularly beneath the planned pit floor. This quarter 4 RC holes for 1,024m were completed.
Drilling at Panique continued with RC drilling and RC/Diamond tailed holes with 22 RC holes for 3,649m and 5 RCD holes for 1,525.4m drilled during the quarter. Results received show mostly thin widths for the Dabu structure. Further drilling is planned for the southern end of Dabu Structure.
Drilling continued at Old Lady prospect this quarter with 13 holes (2,426.5m) completed. A further 2 holes will be drilled to complete this current program targeting the depth extensions of the mineralisation. Results received for the Quarter indicate the width of the mineralised zone decreases at depth with a corresponding decrease in grade. Best intersection received for the quarter was from ODRC056, 10m @ 1.14g/t Au from 15m. Additional drilling will depend on pending results.
Drilling resumed during the quarter at Montana North with one hole, MONRC014, completed at 92m and 3 holes MON013, 015, 016 suspended short of target depth due to high water flows. Assays were received during the month for holes MONRC001 - 009 (Note; MONRC002 abandoned before reaching target mineralized zone). Intersections in holes MONRC001 - 008 have delineated additional mineralization below the old Montana Pit. Along strike, 100m to the NW of the old Montana Pit, MONRC009 has confirmed the good width and grade intersection in MONRC010 extends down dip to ~ 80m vertical. Better intersections include: 20m @ 1.54g/t Au, 14m @ 1.37g/t Au, 17m @ 1.37g/t Au, and 7m @ 1.17g/t Au. An additional 6 drill pads have been prepared following the arc like westerly trend of the structure, with drilling in progress.
Drilling commenced at Young Lady Prospect during the quarter. A total of 6 holes were completed for 1,083.80m. Up to 20m of mineralized quartz was intersected in holes WYRC001, 005 and 006. The structure appears to thin out towards the east as shown in WYRC003, WYRC004, however further drilling is required to fully understand this zone. No results are available yet.
Drilling at the Vicar Mining Property at Pajo Hill started during the quarter. A total of 13 diamond drill holes have been drilled during the Quarter for a total of 2577.30m. Wide intersections of quartz veining and stock work zones have been reported from most of the holes. Drilling is ongoing with no results received as yet.
The Baleno prospect is located 4km to the SE of the mining area and is centred on a small historic open pit containing copper mineralisation hosted in diorite. Work completed during the quarter included 6 holes totalling 3,136.3m of DD Core. Assay results were received for the first 3 holes. A work program will be organised for geochemical sampling and detailed mapping of the area when all assays are received and data compiled and interpreted.
Regional Mapping & Sampling
The regional mapping team completed some follow up work over the Pajo Hill area during the quarter, completing their contract. The work covered the area South West, West and North West of the Pajo Hill area. A wider section of mineralized quartz veining was mapped North West of the Grand View structure which is about sub-parallel to the Pajo Structure. Rock chip samples have returned grades of up to 10g/t Au.
In addition to the anomalies reported last quarter, results from -80# stream sampling have identified an anomaly at Bart- Ag East; A strongly anomalous drainage with multiple anomalous streams draining an area of 1.5 km2 adjacent to the eastern boundary of the exploration lease due east of the Bart - Ag prospect.
Table of Anomalous Intersections
Main Vein North Split
Panique - Dabu
|PQRC109||30172||24763||1145||229||-45||144||1||48||47||34||0.86||Atlas Mining Dump|
- No top cut
- 0.40 lower cut off
- Maximum 2.0m internal waste
- Minimum diluted grade 0.40
- True widths calculated and presented
As at 30 September 2012, cash and liquid assets were US$182.6M (June quarter: $151.4M). Cash and bullion on hand represented US$122.6M of that balance - including the cash reserves of Filminera Resources Corporation while cash and bullion at 30 June was US$110.1M. This was after having paid the interest and principal repayment on the BNP arranged project finance facility for the September quarter of US$4.5M. The outstanding project finance facility has now reduced to US$22.9M at 30 September 2012 (30 June 2012: $27.2M). During the quarter, 50,000 outstanding options due to expire on 30 September 2012 and 40,000 options due to expire on 17 November 2013 were exercised for total gross proceeds of A$91,000,150,000 unexercised options expired and 250,000 unexercised out of the money options issued to employees now resigned were cancelled, per the terms of the Employee Option Scheme.
At 30 June 2012, the Company had 5,831,250 options on issue and the total issued capital was 337,865,726 fully paid ordinary shares.
On September 19, 2012, the Company announced it had entered into a definitive Merger Implementation Agreement ("Merger Agreement") to merge B2Gold Corp. ("B2Gold") and the Company at an agreed exchange ratio of 0.74 B2Gold common shares for each CGA share held, which represents a purchase price of approximately C$3.18 per CGA share (based on the closing share prices on 17 September 2012, being just prior to announcement). The proposed merger has received strong endorsement from both shareholders and the wider investment community. It will be implemented by way of a Scheme of Arrangement under the Australian Corporations Act 2001 ("Scheme"). Upon completion of the Scheme, existing B2Gold shareholders and CGA shareholders will own approximately 62% and 38%, respectively, of the issued common shares of the combined company. There are a number of conditions precedent such as shareholder approval by both CGA and B2Gold shareholders and it is subject to traditional terms and conditions for transactions of this nature.
Mark Savage, who has been a director and Chairman of the Board since April 2000, has indicated his intention to step down from the Board, effective from the date of the Annual General Meeting of shareholders - 28 November 2012. Mark has overseen the successful development of the Company, through to the recent announcement of the proposed merger with B2 Gold, which at the date of the announcement valued the Company at in excess of $1.1bn. The entire Board of CGA would like to express their sincere gratitude to Mark Savage for the outstanding contribution he has made to CGA.
ABOUT CGA MINING LIMITED
CGA is listed on the main board of the Toronto Stock Exchange and ASX. The Masbate Gold Project in the Philippines was successfully constructed with first gold poured mid-2009. The project has a total measured and indicated resource base of 5.13M ounces of gold, total inferred resource base of 2.83M ounces of gold and a proven and probable reserve of 3.097M ounces of gold.
The 4Mtpa designed plant was constructed by Leighton Contractors Asia Limited ("Leighton") without one lost time injury. The mining contract for the Masbate Gold Project has been awarded to Leighton, the largest mining contractor in the world. CGA has completed a US$12M investment program designed to upsize throughput to 6.5Mtpa at Masbate. The project is forecast to produce at a rate of over 200,000 ounces per annum (Year ended 30 June 2011: 190,033 ounces).
CGA has an aggressive exploration strategy. It is planned to undertake 100,000m of drilling as part of US$20M expenditure over the next twelve months.
CGA has a disciplined acquisition program focused on acquiring new gold projects with a substantial initial resource with the capacity to grow materially and where the development and operational experience of CGA can be applied to enhance shareholder value.
NATIONAL INSTRUMENT 43-101 AND JORC COMPLIANCE
Mr Mark Turner, BE Min(Hons), M.Aus.I.M.M.CP Man, CGA's Chief Operating Officer, is acting as the Qualified Person in compliance with NI 43-101 and JORC reporting requirements with respect to this announcement. He has prepared and or supervised the preparation of the scientific or technical information in this announcement and confirms compliance with NI43-101 and JORC requirements.
The information in this news release that relates to the 2011 mineral resource estimate is based on information compiled by Mr. Andrew Vigar, who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr. Vigar is a full time employee of Mining Associates Limited. Verification of the data included site visit, database validation of historical drill results and review of sampling and assaying protocols. Mr. Vigar has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration to qualify as a Competent Person as defined the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' ("JORC Code") and as a Qualified Person NI 43-101. Mr. Vigar consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.
The information in this news release that relates to the 2011 mineral reserve estimate is based on information compiled by Mr. Stephen Jones, who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr. Jones is an employee of Golder Associates Pty Ltd. Verification of the data included site visit, validation of operating procedures and equipment and the ability of the mine site to mine the reserves. Mr. Jones has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration to qualify as a Competent Person as defined by the JORC Code and as a Qualified Person under NI 43-101. Mr. Jones consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This announcement includes certain "forward-looking statements" within the meaning of Canadian securities legislation. All statements, other than statements of historical fact, included herein including, without limitation, statements regarding milestones related to the Masbate Gold Project, production estimates and CGA's future operating or financial performance, are forward-looking statements.. Forward-looking statements involve various risks and uncertainties and are based on certain factors and assumptions. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from CGA's expectations include uncertainties related to fluctuations in gold and other commodity prices and currency exchange rates; uncertainties relating to interpretation of drill results and the geology, continuity and grade of mineral deposits; uncertainty of estimates of capital and operating costs, recovery rates, production estimates and estimated economic return; the need for cooperation of government agencies in the development of CGA's mineral projects; the need to obtain additional financing to develop CGA's mineral projects; the possibility of delay in development programs or in construction projects and uncertainty of meeting anticipated program milestones for CGA's mineral projects; and other risks and uncertainties disclosed under the heading "Risk Factors" in CGA's Annual Information Form for the year ended 30 June 2012 filed with the Canadian securities regulatory authorities on the SEDAR website at sedar.com.
SOURCE: CGA Mining Limited
For further information:
President & CEO - Michael Carrick
Tel: +61 8 9263 4000
Fax: +61 8 9263 4020
Email: [email protected]
Independent Chairman - Mark Savage
Tel: +1 505 344 2822
Fax: +1 505 344 2922
Email: [email protected]