PAPUA NEW GUINEA – Simberi produces 250,000th ounce

Allied Gold has poured its 250,000^th ounce of gold after restarting operations at its Simberi Mine in New Ireland province.

The mine began commercial production in 2008 with a modest eight year outlook, and is now putting in place new efficiency measures and expanding operations to see a minimum 100,000 ounces produced annually for the next decade. It’s hoped a sulphide processing circuit will add further life to the open cut mine. The company says it could be producing up to 250,000 ounces each year by 2015.

A three week shutdown was scheduled in October for repairs to the ball mill and will reduce the total output for the December quarter to about 14,000 ounces compared to the average 18,000 ounces. The 2011 full year production is expected to be 58,000 ounces, compared to the 70,000 ounces forecast.

Allied Gold managing director Frank Terranova says “The lower production has seen average cash costs increase. This means the cash costs for the year will be in the order of US$1000 per ounce compared to the US$850 per ounce it would otherwise have been. We anticipate that the annul production rate of 70,000 ounces will be reflected in the March quarter and then a lift in production during 2012 towards 100,000 ounces. Higher throughput will reduce costs and the investments we are making with heavy fuel oil generators should also push costs down further.”

Heavy fuel oil generator sets will be progressively installed during the June quarter of 2012. The expansion of the processing plant to an annual 3.5 million tonnes operation is scheduled to be completed by September 2012, with a number of pieces of equipment already on site awaiting installation.

Drilling will continue at Simberi on the oxide and sulphide potential of various pits. The bankable feasibility study for sulphide circuit to lift production is scheduled for release in mid-2012. The company will also continue exploration to further build on its resource base in Papua New Guinea and the Solomon Islands.

www.alliedgold.com.au