Copper production at Oxiana"s Sepon mine in Laos was up during the last quarter while gold production was lower owing to wet conditions.

Copper mining benefited from a lower stripping ratio of 1.6:1 with 502,769 tonnes of ore recovered. Ore processed was up with 315,968 tonnes milled at an average head grade of 5.54%. Production was higher at 16,271 tonnes of copper cathode for the quarter.

Work on the Sepon copper expansion feasibility study has progressed and exploration around known resources and at greenfields prospects continues to deliver significant new copper mineralization.

Drilling with six rigs continued resource evaluation at the Thengkham North and South copper deposits. Significant results defining high grade mineralized channels included 16 metres at 7.9% copper, 14 metres at 6.0% and 41 metres at 10.6% in the north and 17.7 metres at 4.7% copper, 26 metres at 5.8% and 33.3 metres at 3% in the south.

As part of the study, resource evaluation drilling started at Pha Bing prospect. Better results included 38 metres at 8.1% copper and 25 metres at 3.3%. Geometry appears similar to the Thengkham deposits.

Initial scout drilling at the Nam Pa prospect to test a large copper soil anomaly intersected shallow copper mineralised skarns. To the west of Thengkham wide-spaced, shallow drill holes intersected low to moderate grade copper, including 22 metres at 1.9% copper.

Gold production was lower due to wet conditions impeding pit access at times but was in line with plans. Mined grades were also lower at 1.36 grams/tonne gold. Processing and production was to plan with 25,791 ounces poured. Gold production in the third quarter will be lower but the forecast of around 100,000 ounces for the year remains.

Resource development drilling outlined further shallow oxide mineralization around the Nalou pit. Resource evaluation for the primary gold feasibility study focussed on data compilation, validation and geological modelling.

At Dankoy and Houay Yeng prospects data compilation and resource modelling are well advanced. While both are expected to provide modest contributions to the Sepon oxide gold resource inventory, recent drilling has outlined potential for higher grade zones in each prospect.

Recent drilling also highlighted potential for primary gold resources at Ban Mai, 15km west of the Sepon mine, with a number of significant gold intersections along the margins of porphyry bodies.