Exploration Update and Barrick JV variation

 

TIDMAGLD 
 
RNS Number : 8508H 
Allied Gold Limited 
01 March 2010 
 

 
 
 
                   ("Allied", "Allied Gold" or "the Company") 
 
              Exploration Update: Tatau and Big Tabar Islands (PNG) 
 
                       Barrick Gold Farm-in and JV Varied 
               Allied Gold to Manage Future Exploration Programme 
 
Allied Gold Limited ("Allied Gold" or the "Company") (TSX:ALG; ASX:ALD; 
AIM:AGLD) and Barrick Gold have agreed to vary their exploration programme and 
commitments for the Big Tabar and Tatau Islands, 20 kilometres south of the 
Allied Gold's  current  75,000 - 80,000ozpa Simberi gold mine in Papua New 
Guinea. 
Allied Gold had previously agreed in March 2008 to a farm-in which would have 
seen Barrick initially earn a 51 per cent interest in the Big Tabar and Tatau 
exploration licences, subject to a minimum four year spend of A$8 million. 
Barrick had expended more than $A10 million as of January 2010 
Allied Gold will now retain 100% interest in the Big Tabar and Tatau Islands 
and has agreed to pay Barrick an immediate $A2.5 million payment and a further 
$3 million in July either as cash or Allied shares.  The issue of any Allied 
shares to Barrick will be at a 10% premium to market.  Barrick has also agreed 
to place its holding in Allied Gold into escrow until 2012. 
Allied Gold Executive Chairman Mark Caruso said today, "Two years ago, Allied 
Gold was in start-up phase and we did not have the time or resources to devote 
to the region's potential, and were also constrained by project financing 
covenants.  However, given the incremental consolidation of production at 
Simberi, it now makes sense from a cost effectiveness and a community 
perspective to have our own team more directly leading the exploration 
activities at nearby Tatau and Big Tabar.  The relationship with Barrick remains 
very sound.  However, both companies currently have a different resource scale 
relative to underpinning development." 
Barrick have conducted preliminary drilling on Tabar Island on the Banesa and 
Tupinda prospects and identified copper , gold, porphyry style mineralisation 
which warrants further assessment.  In addition, a significant effort was 
dedicated  on Tatau to establish base line geological  data which confirmed 12 
prospects, of which six (6) are  highly prospective drill targets.  Therefore, 
we will seek to accelerate our own drilling program with a scheduled 
commencement of drilling  anticipated in April on Tatau Island 
The Tabar Islands group consisting of the Simberi, Tatua, Mapua and (Big) Tabar 
islands in the north of the New Ireland Province in PNG cover approximately 
270sqkm. 
Preliminary drilling in May 2009 was conducted on the Banesa and Tupinda 
prospects on Tatau Island (see Allied Gold's 2009 Annual Report Pages 36-37 for 
more detail).  Given the historical success of exploration at Simberi, the 
Directors are confident of announcing positive further news for the prospects on 
the Tatau and Big Tabar islands in due course. 
 
About Allied Gold: The Simberi gold mine (60km from Lihir Island) has produced 
150,000 ounces since production commenced in February 2008.  Production in 2010 
is expected to be approx 75,000-80,000 ounces, with an expansion later in the 
year to lift Simberi plant throughput from 2Mtpa to 3Mtpa and gold output 
towards 100,000 ozpa.  The Simberi sulphide project resource update is expected 
in March 2010 with a  feasibility study expected during 2011.   Allied Gold 
acquired the Gold Ridge project in the Solomons Island in late 2009 and 
pre-development works are currently underway, with production of 120,000 ozpa 
expected in FY2012. 
 
 
For more information: 
+----------------------------------+--------------------------+ 
| Mark Caruso                      | T:[phone]       | 
| Executive Chairman               |                          | 
|                                  |                          | 
+----------------------------------+--------------------------+ 
| Roland Cornish                   | T: [phone]  | 
| Beaumont Cornish Limited         |                          | 
+----------------------------------+--------------------------+ 
 
 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
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