Gold Ridge Project Update

 

TIDMAGLD 
 
RNS Number : 0237M 
Allied Gold Limited 
17 May 2010 
 

FOR IMMEDIATE RELEASE 
       17 May 2010 
                              allied gold limited 
                                ("the Company") 
 
                                  Media Release 
 
                          GOLD RIDGE (SOLOMON ISLANDS) 
                      A$64M LUMP SUM REFURBISHMENT CONTRACT 
                    TOTAL PROJECT SPEND ESTIMATED AT A$150M 
                         FIRST GOLD PLANNED FOR Q1 2011 
 
 Allied Gold has awarded an A$64 million Engineering Procurement & Construction 
(EPC) contract as part of A$150 million re-development of the 120,000 ounce per 
                  annum Gold Ridge mine in the Solomon Islands. 
 
The EPC contract with GR Engineering Services (GRES) involves the refurbishment 
of the existing Gold Ridge process plant and its expansion from 2Mtpa to a 
throughput of 2.5Mtpa, with first gold pour expected in the March quarter 2011. 
 
GRES has worked closely with Allied Gold and its 100% owned subsidiary Gold 
Ridge Mining Limited (GRML) in developing preliminary designs and budget 
estimates. The execution of the EPC contract supersedes a Letter of Intent 
agreed with GRES in March this year. 
 
The Gold Ridge plant modifications include installation of a 28 meter diameter 
thickener, tailings detoxification circuit and an intense leach reactor to treat 
coarse gold in lieu of the gravity tables that were installed in the original 
plant and additional three adsorption tanks. 
 
To complete Gold Ridge's redevelopment, Allied will spend a further A$86M on 
activities including civil construction, the purchase of mine fleet and 
equipment, power station, accommodation, offices and operations buildings, first 
fills and project insurances, operational manning buildup and training, and 
landowner resettlement housing and associated costs. 
 
About Gold Ridge: 
The Gold Ridge mine, located on the island of Guadalcanal, was constructed in 
1997/98 by GRES whose key personnel (as JR Engineering) initially engineered and 
constructed the project in 1998. The mine operated for 22 months and closed in 
June 2000 due to local ethnic tensions.  Ore mined from one of the four 
identified pits produced 210,000 ounces of gold. As a result of the closure the 
ownership of the project and GRML passed to the American Home Insurance Company 
(AHAC). In July 2003 the Australian Federal Government together with Pacific 
Forum countries agreed to send Regional Assistance Mission to Solomon Islands 
(RAMSI) to stabilise and commence process of rebuilding the nation. 
 
In June 2004 AHAC commenced sale process of the Gold Ridge Project, and by 
December 2004 Australian Solmons Gold Limited (ASG) signed a purchase agreement 
which was settled in May 2005. ASG commenced carrying out re-establishment of 
site infrastructure, feasibility studies and exploration activities. In 2008 
GRES was selected as preferred contractors to carry out the engineering, 
procurement and construction of the gold process plant. Part of work was also to 
generate capital and operating costs for the development and operation of the 
process plant. 
 
In September 2009 Allied Gold announced an agreed off-market takeover offer for 
ASG shares which was completed early in 2010. 
 
The current Probable Reserves at Gold Ridge are 19.560Mt at 1.8g/t gold for 1.15 
million contained ounces. The reserves have been estimated from the following 
resources. 
 
+-----------+---------+-------+---------+ 
| Class     | Tonnes  | Au    | Cont.   | 
|           | (000's) | Grade | Au      | 
|           |         | (g/t) | Ounces  | 
|           |         |       | (000,s) | 
+-----------+---------+-------+---------+ 
| Measured  |   5,880 |   1.9 |     359 | 
+-----------+---------+-------+---------+ 
| Indicated |  23,610 |   1.7 |   1,268 | 
+-----------+---------+-------+---------+ 
| Total     |  29,490 |   1.7 |   1,627 | 
| M&I       |         |       |         | 
| Resources |         |       |         | 
+-----------+---------+-------+---------+ 
| Inferred  |   8,300 |   1.8 |     480 | 
|           |         |       |         | 
+-----------+---------+-------+---------+ 
 
 The current mine plan will realize gold production of approximately 943,000 
ounces of gold over a 7.8 year mine life or approximate average annual gold 
production of  120,000 ounces. The ore will be mined from four deposits. 
 
A full copy of the announcement including a map of the Gold Ridge project, is 
attached as a link to this announcement: 
http://www.rns-pdf.londonstockexchange.com/rns/0237M_-2010-5-17.pdf 
 
For further information, contact: 
 
Allied Gold Limited 
Mark Caruso 
Executive Chairman 
T:[phone] 
 
Frank Terranova 
Chief Financial Officer 
T:  [phone] 
M: [phone] 
E: [e-mail] 
 
Peter Torre 
Company Secretary 
T: [phone] 
E: [e-mail] 
 
Beaumont Cornish Limited 
 
Roland Cornish 
Beaumont Cornish Limited 
T: [phone] 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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