Production will start this month at Allied Gold’s Simberi Oxide Gold Project on Simberi Island in Papua New Guinea.

Dry commissioning activities began in December but first gold production was delayed by some minor teething issues mainly relating to the failure of mechanical and electrical equipment.

The Simberi Project is an open-pit mining project where ore will be extracted from at least seven deposits which represent the known surface and near-surface oxidized caps to underlying sulphide gold mineralization on eastern Simberi Island.

After the initial delivery of ore by standard truck haulage, ore delivery will be by an aerial rope conveyor to a conventional carbon-in-leach processing facility.

Allied has total oxide/sulphide resources of almost 2.4 million ounces of gold of which 783,000 ounces of oxide and transitional gold reserves, and mineral resources are within designed open pits.

Exploration activities on target areas outside the current mine plan continue to deliver highly encouraging results. Best results include 35m @ 2.35 grams/tonne gold from surface and 1m at 5.36 grams/tonne gold from 69m.

The third of the four drilling rigs arrived at site in mid-December and the other rig is scheduled to be delivered this quarter.

Geophysical and soil geochemical surveys on Simberi, Tatau and Big Tabar islands continue to identify new drill targets.

Continuing progress is being made on the exploration of the partially overlapping Tupinda and Fotombar calderas at the northern end of Big Tabar Island. A temporary camp has almost been completed near the centre of the Tupinda caldera.

To help fund the continuing mine development and exploration programmes Allied Gold has raised about Aus$10.5 million through an institutional share placement to existing shareholders.

www.alliedgold.com.au