Simberi Gold Mine Resource Update (8738C)

TIDMAGLD

RNS Number : 8738C

Allied Gold Limited

14 March 2011

FOR IMMEDIATE RELEASE 14 March 2011

allied gold limited

("the Company")

"This press release is not for dissemination in the USA and shall not be disseminated to USA news services"

SIMBERI GOLD MINE, PNG

172% INCREASE AT BOTLU DEPOSIT - TO 429, 000 oz

Allied Gold advises that Resource definition drilling at Allied Gold's 100% owned Simberi gold mine in Papua New Guinea has led to a 271,000 ounce increase in Inferred Mineral Resources Botlu deposit.

The estimated Measured and Indicated resources at Simberi now stand at 80.4Mt @ 1.26g/t Au, containing 3.26 Moz gold, with additional Inferred Resources of 91.9 Mt @ 1.00g/t Au containing 2.95 Moz gold (see Appendix 1 below).

A newly updated Mineral Resource of predominantly sulphide mineralisation has increased the estimated Inferred Resources at Botlu to 8.4 Mt at a grade of 1.59 g/t Au for 429,000 ounces gold as at February 2011. This represents an increase of 172% from previous total Measured, Indicated and Inferred Resources of 3.4 Mt @ 1.44g/t Au containing 158,000 ounces gold. (ALD - Revised NI 43-101 Technical Report, 9/11/2010).

RESOURCE ESTIMATION METHOD

The table reports resources in Oxide using a 0.5g/t Au block grade cut-off and in Transition and Sulphide using a 1.0g/t Au block grade cut-off.

The resource estimate is based on results from 165 drill holes totaling 14,950m drilled (29 core holes / 6,142m, 96 RC drill holes / 5,002m and 40 aircore holes / 3,805m). In addition to previous work, the database incorporates the results of a 15 hole / 3,174m core drilling programme, undertaken between June and December 2010.

The holes provide 13,230 analysed samples. Four core holes / 250m, drilled for metallurgical purposes prior to the previous resource estimate in 2003, were not assayed. Pierce points in the modelled parts of the 4 wire-framed domains range up to 75 metres apart down dip and 25 metres along strike. Drill hole sample assays were composited to 3m, providing 4,977 data values inside the modelled area. Seventeen composite average grades were cut to 10g/t Au, prior to block grade interpolation using the Inverse Distance Squared (ID2) algorithm. Block sizes in the model were 10m x 10m x 10m (parent cell) to 5m x 5m x 5m (sub-cell). The search ellipse used ellipse was 50m along strike, 50m down dip and 12.5m in the minor axis.

QUALITY CONTROL

Allied Gold employs a QA/QC protocol on all aspects of the analytical procedures currently undertaken. Core is logged, cut and sampled at the secure Simberi core logging facility. Core is generally sampled on a one metre basis, with half of the core is crushed, split to approximately 1.5kg and pulverised at the adjacent Exploration Sample Preparation Facility. The pulverised sample is sent for analysis by fire assay/AAS finish at ALS Laboratory in Townsville or Aqua Regia Digest/AAS finish at the dedicated Exploration Analytical Laboratory on-site. One half of the generally HQ core (PQ and limited NQ core sized core is also used) is restored to the core box for future reference. A blank sample is inserted every 40th sample and CRM standard samples, representing a range of grades, are also inserted at intervals of 1 in 40 samples. At least 5% duplicates, both splits of crushed core (Field Duplicates) and pulps (Pulp Duplicates) are included in each batch sent for analysis. A second split of the duplicates is retained for re-analysis at Genalysis Laboratory Services in Townsville, Australia. The current QA/QC data is rejected unless within acceptable parameters. The Quality Control for the project is supervised by Allied Gold Chief Geologist, Philip Davies who is a Qualified Person as defined under The JORC Code, 2004 Edition.

GEOLOGY

The Botlu Deposit gold mineralisation is associated with volcanic breccias that cut, at steep angles, through the largely latite andesite and minor volcanic tuff host rocks. The four modelled domains strike generally east-west and dip both north and south around an unmineralised andesite core. The gold mineralisation occurs with fine grained disseminated sulphides. Abundant very fined grained in the matrix of volcanic breccia typically hosts the highest grade gold. Pervasive silica, carbonate and potassic alteration, typically 5 to 10%, is common recorded however quartz or carbonate veining was uncommon in the latest diamond drilling that tested deeper parts of the deposit.

The full announcement and appendices can be viewed on the Company's Website www.alliedgold.com.au.

For more details, please contact:

Simon Jemison Investor Relations & Media [phone]

Rebecca Greco Investor Relations, North America [phone]

David Simonson c/. Merlin PR [phone]

Beaumont Cornish Limited

Roland Cornish

Beaumont Cornish Limited

T: [phone]

APPENDIX 1 - Simberi Estimated Resources with updated Botlu Resource (highlighted in GREY) as at February 2011. Original Source: ALD - November 2010 REVISED TECHNICAL REPORT, Simberi Gold Project, Simberi Island, Papua New Guinea (Golder Associates Report Number: 1097641039-005-R01).3.7 Resource Simberi Resource (0.5 g/t Au cut off - depleted to eom October 2010)

 
 Deposit    Material           Measured             Indicated               Inferred 
---------  ------------  -------------------  ---------------------  --------------------- 
                                    Au                   Au                     Au 
                             Mt    g/t            Mt    g/t     koz      Mt    g/t     koz 
---------  ------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
 Bekou      Oxide                               0.04   1.74       2    0.06   1.14       2 
---------  ------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
  Transition                                    0.01   1.17       0    0.05   1.16       2 
 ----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
  Sulphide                                      0.02   1.93       2    0.92   1.38      41 
 ----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
 Bekou Total                                    0.07   1.76       4    1.02   1.36      45 
-----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
 Botlu      Oxide                                                      2.10   1.21      81 
---------  ------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
  Transition                                                           0.15   1.83       9 
 ----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
  Sulphide                                                             6.13   1.72     339 
 ----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
 Botlu Total                                                           8.39   1.59     429 
 Pigibo     Oxide                               2.96   1.11     106    0.60   0.89      17 
---------  ------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
  Transition                                    2.19   1.19      84    0.51   0.92      15 
 ----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
  Sulphide                                      3.86   1.11     137    6.22   0.94     188 
 ----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
 Pigibo Total                                   9.00   1.13     327    7.33   0.93     220 
-----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
 Pigicow    Oxide                               0.15   1.65       8    0.29   1.30      12 
---------  ------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
  Transition                                                           0.11   1.29       4 
 ----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
  Sulphide                                                             2.00   1.26      81 
 ----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
 Pigicow Total                                  0.15   1.65       8    2.39   1.26      97 
-----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
 Pigiput    Oxide          3.02   0.87    85    4.60   0.92     137    2.01   0.79      51 
---------  ------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
  Transition                                    1.95   0.89      56    0.77   0.83      21 
 ----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
  Sulphide                                     32.56   1.51   1,583   32.25   1.00   1,042 
 ----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
 Pigiput Total             3.02   0.87    85   39.12   1.41   1,775   35.03   0.99   1,114 
-----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
 Samat 
  East      Oxide                                                      0.40   1.13      14 
---------  ------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
  Transition                                                           0.08   0.78       2 
 ----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
  Sulphide                                                             3.50   0.78      88 
 ----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
 Samat East Total                                                      3.98   0.82     105 
-----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
 Samat 
  north 
  A         Oxide                               0.16   0.75       4    0.11   0.84       3 
---------  ------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
  Transition                                    0.04   1.29       2    0.01   1.26       0 
 ----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
  Sulphide                                      0.36   0.81       9    1.08   0.86      30 
 ----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
 Samat North 
  A Total                                       0.56   0.83      15    1.20   0.86      33 
-----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
 Samat 
  North 
  B         Oxide                               0.12   0.86       3    0.12   0.75       3 
---------  ------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
  Transition                                    0.05   2.86       5    0.02   0.78       1 
 ----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
  Sulphide                                      1.90   1.22      74    1.05   0.73      25 
 ----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
 Samat North 
  B Total                                       2.06   1.24      82    1.19   0.73      28 
-----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
 Samat 
  South 
  A         Oxide                               0.02   2.11       1    0.16   1.28       7 
---------  ------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
  Transition                                    0.01   0.98       0    0.01   0.77       0 
 ----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
  Sulphide                                      0.02   1.01       1    1.73   0.97      54 
 ----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
 Samat South 
  A Total                                       0.05   1.53       2    1.90   0.99      61 
-----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
 Samat 
  South 
  B         Oxide                               0.05   2.94       5    0.17   1.51       8 
---------  ------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
  Transition                                    0.05   2.03       3    0.02   0.99       1 
 ----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
  Sulphide                                      1.70   1.76      96    3.36   1.07     115 
 ----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
 Samat South 
  B Total                                       1.80   1.80     104    3.54   1.09     124 
-----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
 Sorowar    Oxide          5.81   1.30   243    8.56   1.08     298    2.40   1.09      84 
---------  ------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
  Transition               0.54   1.17    20    1.46   1.14      53    0.29   0.83       8 
 ----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
  Sulphide                 1.30   0.93    39    6.93   0.92     205   19.03   0.90     549 
 ----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
 Sorowar Total             7.64   1.23   302   16.95   1.02     556   21.72   0.92     641 
-----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
 Sorowar 
  South     Oxide                                                      0.68   0.82      18 
---------  ------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
  Transition                                                           0.28   0.68       6 
 ----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
  Sulphide                                                             5.39   0.66     114 
 ----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
 Sorowar South 
  Total                                                                6.35   0.67     138 
-----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
 Grand Total              10.66   1.13   387   69.76   1.28   2,874   91.95   1.00   2,953 
-----------------------  ------  -----  ----  ------  -----  ------  ------  -----  ------ 
 

About Allied Gold

Allied Gold is an emerging 200,000 ounce per annum gold producer with production and exploration assets in Papua New Guinea and the Solomon Islands approximately 3 hours by plane from Brisbane, Australia. The company's 100%-owned Simberi gold mine is 80 kilometres from Lihir Island in the New Ireland province of Papua New Guinea. Simberi commenced gold production in 2008, produced 64,000 ounces in 2009-10 and its process plant is being expanded to a throughput of 3.5 Mtpa to produce 100,000 ounces per annum by late 2011. Allied Gold acquired Gold Ridge in the Solomon Islands in late 2009 when it acquired Toronto-listed Australian Solomons Gold. Allied has invested $150 million to refurbish and redevelop Gold Ridge which is expected to produce an average 120,000 ounces per annum for a minimum ten years.

Allied Gold Limited is listed on the ASX, TSX and the London AIM exchanges.

Competent Persons

The information in this Stock Exchange Announcement that relates to Mineral Exploration results, together with any related assessments and interpretations, have been verified by and approved for release by Mr P R Davies, MSc, BSc, M.Aus.I.M.M., a qualified geologist and full-time employee of the Company. Mr Davies has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr Davies consents to the inclusion of the information contained in this ASX release in the form and context in which it appears.

The information in this report that relates to Mineral Resources is based on a resource estimate prepared by Allied Gold Resource Geologist Mrs Carmel Grant, under the supervision of Chief Geologist Mr Philip Davies. Both are registered members of the AusIMM. Mrs Grant has more than five years experience relevant to gold resource estimation and qualifies as a Competent Person as defined in the 2004 edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" Both Mrs Grant and Mr Davies consent to the inclusion in this report of the matters based on the information in the form and context in which it appears.

Forward-Looking Statements

This press release contains forward-looking statements concerning the projects owned by Allied Gold. Statements concerning mineral reserves and resources may also be deemed to be forward-looking statements in that they involve estimates, based on certain assumptions, of the mineralisation that will be found if and when a deposit is developed and mined. Forward-looking statements are not statements of historical fact, and actual events or results may differ materially from those described in the forward-looking statements, as the result of a variety of risks, uncertainties and other factors, involved in the mining industry generally and the particular properties in which Allied has an interest, such as fluctuation in gold prices; uncertainties involved in interpreting drilling results and other tests; the uncertainty of financial projections and cost estimates; the possibility of cost overruns, accidents, strikes, delays and other problems in development projects, the uncertain availability of financing and uncertainties as to terms of any financings completed; uncertainties relating to environmental risks and government approvals, and possible political instability or changes in government policy in jurisdictions in which properties are located. Forward-looking statements are based on management's beliefs, opinions and estimates as of the date they are made, and no obligation is assumed to update forward-looking statements if these beliefs, opinions or estimates should change or to reflect other future developments.

Not an offer of securities or solicitation of a proxy

This communication is not a solicitation of a proxy from any security holder of Allied Gold, nor is this communication an offer to purchase or a solicitation to sell securities. Any offer will be made only through an information circular or proxy statement or similar document. Investors and security holders are strongly advised to read such document regarding the proposed business combination referred to in this communication, if and when such document is filed and becomes available, because it will contain important information. Any such document would be filed by Allied Gold with the Australian Securities and Investments Commission, the Australian Stock Exchange and with the U.S. Securities and Exchange Commission (SEC).

Glossary of terms used in the Announcement:

A 'Mineral Resource' is a concentration or occurrence of material of intrinsic economic interest in or on the Earth's crust in such form, quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories.

An 'Inferred Mineral Resource' is that part of a Mineral Resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and assumed but not verified geological and/or grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes which may be limited or of uncertain quality and reliability.

An 'Indicated Mineral Resource' is that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a reasonable level of confidence. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are too widely or inappropriately spaced to confirm geological and/or grade continuity but are spaced closely enough for continuity to be assumed.

A 'Measured Mineral Resource' is that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a high level of confidence. It is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are spaced closely enough to confirm geological and grade continuity.

Tonnage - An expression of the amount of material of interest irrespective of the units of measurement (which should be stated when figures are reported)

Grade - Any physical or chemical measurement of the characteristics of the Analysis (Value) material of interest in samples or product

Cut off grade - The lowest grade, or quality, of mineralised material that qualifies as economically mineable and available in a given deposit. May be defined on the basis of economic evaluation, or on physical or chemical attributes that define an acceptable product specification.

Mineralisation - Any single mineral or combination of minerals occurring in a mass, or deposit, of economic interest.

Assay - The proportion of a particular metal (eg Au and Ag) in a sample derived by laboratory analytical techniques.

Analysis limits of detection for Au is <0.01 g/t. Au assays are determined by a 50gm fire assay and an AAS (Atomic Adsorption Spectrometry) finish. Any interval recorded as being below detection has been recorded in the database as having a grade of half the detection limit, which in this case is 0.005 g/t. The Ag detection limit is 0.2g/t, and is derived from a 0.5g charge Aquaregia digest, with assay via ICP (Induced Coupled Plasma) AES.

Mineralisation types are:

Oxide - extremely weathered material (cyanide leach recoveries > 90%), 0.5 g/t Au cutoff

Transitional - distinctly weathered material (cyanide leach recoveries 50-90%), 0.5 g/t Au cutoff

Sulphide - Slightly weathered to fresh material (cyanide leach recoveries generally <50%), 0.5 or 1.0 g/t Au cutoff

Ounce - 1 troy ounce = 31.10348 grams

Tonnes - Are estimated on a dry basis and defined as a measurement of mass equal to 1000kg which is equivalent to 2204.622 pounds.

Tuff - A rock composed of pyroclastic materials that have been ejected from a volcano. In many instances these fragments are still hot when they land, producing a "welded" rock mass.

Mineral Resource estimate - An estimate of tonnage and grade (mineral content) of a deposit by a variety of techniques including geometrical classical methods and or geostatistical methods.

Mt- Million Tonnes

Moz - Million Ounces

Andesite - A fine-grained, extrusive igneous rock composed mainly of plagioclase with other minerals such as hornblende, pyroxene and biotite.

Ordinary kriging (OK) - is a geostatistical approach to modeling. Instead of weighting nearby data points by some power of their inverted distance, OK relies on the spatial correlation structure of the data to determine the weighting values. This is a more rigorous approach to modeling, as correlation between data points determines the estimated value at an unsampled point.

Authorised for release

14 March 2011

Peter Torre

Company Secretary

This information is provided by RNS

The company news service from the London Stock Exchange

END

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