3rd Quarter Results
April 28 2005 - 5:37AM
UK Regulatory
RNS Number:6332L
Ballarat Goldfields N.L.
28 April 2005
BALLARAT GOLDFIELDS NL
A.C.N. 006 245 441
ASX release: 28 April 2005
Quarterly Activities and Cash flow Report
For the 3 months ended 31 March 2005
Highlights
* First gold production at Ballarat East brought forward to the December
quarter 2005, approximately 6 months ahead of the pre-feasibility schedule.
* BGF increases gold Inferred Resource at Ballarat East to 1.1 million
ounces and increases Exploration Potential at Ballarat to 9.2 million
ounces.
Significant high grade gold intersections at Ballarat East include:
30.0m @ 24.0g/t,
9.0m @ 6.0 g/t,
3.8m @ 9.1g/t,
1.2m @ 19.3g/t.
* Construction commenced on the new exhaust ventilation shaft.
* A $17 million bridging finance facility arranged with Investec Bank
(Australia) Ltd to facilitate the early production at Ballarat East.
BALLARAT EAST PROJECT DEVELOPMENT
All development work is on schedule. Further details on the development are set
out below.
Underground decline development
At the end of the quarter, the underground development had advanced a total of
628m. Mine development has been focused on the vent access drive which will
connect the decline and the new exhaust ventilation shaft (named the North
Prince Extended Ventilation Shaft).
Mining conditions have been as expected. Structures that have been outlined in
BGF modelling have been approached and mined through successfully. An undetected
flat dipping structural unit has slowed development advance along the main vent
access drive but is not expected to hinder the vent shaft connection process.
Multiple headings which became available during the quarter as development
progressed towards establishing the Sulieman, First Chance and vent access
drives, now provide the underground contractor with added flexibility.
Figure 1. Ballarat East underground development
Ventilation shaft construction
During the quarter, the contract for the construction of the North Prince
Extended Ventilation Shaft was awarded to Mancala Pty Ltd. The fully concrete
lined shaft will be constructed by blind sink to a total depth of around 120
meters.
The shaft is 6.1m in diameter and is engineered for the working life of the mine
and of sufficient capacity (diameter) for all future ventilation requirements.
Development of the shaft will be via an electric excavator and rockbreaker (when
required).
Construction commenced on schedule in mid March 2005, with the establishment of
the shaft collar and surface infrastructure. By the end of the quarter, formwork
had been placed in the pre-sink to a depth of 6.5 metres.
Photo 1.
Photo 1. Formwork for the shaft collar before the initial concrete pour for the
North Price Extended Ventilation Shaft
PROJECT DEVELOPMENT PLAN
BGF has been updating its project development plan to incorporate the results of
its recent drilling and optimisation studies.
The recent drilling has delineated a number of ore sources within close
proximity to the existing decline that will allow early mining access. BGF now
plans to begin accessing ore in the September quarter this year and to
commission the process plant in the following quarter.
The early mining access will result in a project development plan that
incorporates a flatter ramp-up to full production than envisaged in the pre
feasibility study as ore sources become progressively available.
The awarding of the plant construction contract is expected to be finalised in
the current quarter.
RESOURCE AND EXPLORATION POTENTIAL UPGRADE
During the quarter, BGF announced an increase in its gold resources at Ballarat
East to 1.1 million ounces and an increase in the Exploration Potential at
Ballarat to 9.2 million ounces. This increase was the result of additional
drilling completed by BGF over an 18 month period to December 2004, and the
acquisition of mining lease MIN4847.
In arriving at the new resource estimate at Ballarat East BGF has:
*reduced the grade of the top cut to 85g/t from 145g/t. This is
significant since BGF's interpretation of the assay data is that the 85g/t
cut off grade excludes the very coarse gold (i.e. gold particles >1.2mm) in
the estimate. Metallurgical test work by BGF and historical data from open
pit mining at Ballarat South in 1997 indicate that up to 50% of the total
gold recovered is very coarse (i.e. gold particles >1.2mm).
*taken a conservative approach by assuming that 20% of the total gold
content within the Inferred Resource estimate is very coarse.
On this basis the estimated Inferred Resource at Ballarat East based on drilling
to December 2004 is 3.1Mt @ 11g/t for 1.1 million ounces.
The possible grade ranges identified for the resource depending on variations of
the very coarse gold content are:
3.1Mt @ 9g/t for 0.9 million ounces (0% very coarse gold)
3.1Mt @ 18g/t for 1.8 million ounces (50% very coarse gold).
The December 2004 Ballarat East Inferred Mineral Resource estimate has been
audited by AMC Consultants. AMC has advised that, in its opinion, the estimate
is fair and reasonable, and is classified and reported in accordance with the
2004 JORC Code. AMC's audit was only in respect of the Inferred Mineral Resource
estimate.
A summary of AMC's opinion is available on BGF's web site at
www.ballarat-goldfields.com.au.
DRILLING RESULTS
Underground definition drilling
Diamond drilling continued during the March quarter at Ballarat East, utilising
two underground diamond drill rigs. The drilling continues to intersect gold
mineralisation in the targeted ore zones identified by the geological model.
Significant assay results from the March quarter drilling are summarised in
Table 1.
Hole number Down hole depth (m) Width (m)* Grade g/t Location
BDD025B 561.1 to 591.3 29.9 24.0 Tiger Fault
---------- --------------- --------- -------- -------------
BDD025 558.3 to 567.6 9.0 6.0 Tiger Fault
---------- --------------- --------- -------- -------------
---------- --------------- --------- -------- -------------
DED159D 280.6 to 281.8 1.2 19.25 Gummy Fault
---------- --------------- --------- -------- -------------
DED159E 286.6 to 289.0 2.4 2.7 Gummy Fault
---------- --------------- --------- -------- -------------
DED158 203.3 to 207.3 3.8 9.1 Hammerhead Fault
---------- --------------- --------- -------- -------------
DED158A 207 to 211 3.8 2.8 Hammerhead Fault
---------- --------------- --------- -------- -------------
Table 1: Assay results within defined target zones received in the March quarter
2005
*All of the intersections reported have been adjusted for their estimated true
widths.
BGF has focussed drilling in the past quarter on three faults within the First
Chance Line (figure 2), known as the Tiger Fault, Gummy Fault and Hammerhead
Fault. Mineralisation intersected on a previously drilled fault (Grey Nurse) and
the Hammerhead Fault are expected to provide for gold production in the later
part of 2005 (figure 3). The current development plan incorporates the mining of
the larger and higher grade Tiger fault in 2007.
BGF's geological model robust
BGF's geological model remains robust as the drilling continues to intersect
gold mineralisation in the target zones identified by the geological model. The
model for Ballarat identified gold mineralisation target zones totalling over 55
million ounces. After probability adjustment for risk and uncertainty the
company derived an Exploration Potential of 8.3 million ounces, with 90%
confidence limits ranging from 2.8 million ounces to 14.4 million ounces in
addition to an inferred resource of 1.1 million ounces for Ballarat East.
(Further information is available on the BGF website
www.ballarat-goldfields.com.au )
Figure 2: Cross section showing recent drilling results from the Tiger fault
within the First Chance line at Ballarat East.
Figure 3: Vertical long section of the resources defined within the First Chance
Line at Ballarat East, with some assay result highlights. The location of the
recent drilling intersection of 30m @ 24g/t is also shown.
CORPORATE AND FINANCE
Finance
The cash balance at 31 March 2005 was $16.5 million.
In early April, BGF arranged a bridging finance facility with Investec Bank
(Australia) Ltd. This facility will allow BGF to commence production at Ballarat
East some six months ahead of the schedule previously envisaged under the
pre-feasibility study.
On completion of documentation, the facility will enable BGF to draw up to $17
million. This facility is expected to be re-paid from the exercise of the listed
options.
The facility does not require BGF to enter into any hedging arrangements.
BACKGROUND INFORMATION
Ballarat East Project Summary
As reported previously, since completing a raising of $27 million in July 2004,
the company moved rapidly to commence extending the decline at Ballarat East.
The pre feasibility completed in June 2004 showed that Ballarat East would be an
underground mine with a potential life of 21 years.
The production schedule in the pre feasibility study had an initial planned rate
of 100,000 ounces per annum, ramping up to an average 200,000 ounces per annum
in year 3, with a weighted average cash cost of production estimated at $A274
per ounce.
The project, evaluated in the study, at an assumed gold price of $A525 ($US390)
per ounce generated an IRR of 34% and a real pre-tax NPV of $A254 million, at a
discount rate of 7%. The 90% confidence limits on this ranges from $A132 million
to $A502 million.
Further details are available on the company's website
www.ballarat-goldfields.com.au
Note:
The information in this report that relates to Exploration Results, Mineral
Resources and Exploration Potential is based on information compiled by Mr
Steven Olsen. Mr Olsen is an employee of Ballarat Goldfields NL, is a member of
the Australian Institute of Mining and Metallurgy and is a Competent Person
under the definition of the 2004 JORC Code. The Exploration Potential described
above is conceptual in nature, and there is insufficient information to
establish whether further exploration will result in the determination of a
Mineral Resource. Mr Olsen consents to the publication of this information in
the form and context in which it appears.
CORPORATE DIRECTORY
Registered and Principal Office Directors
Chairman:
10 Woolshed Gully Drive Colin Smith
Managing Director:
Mt Clear Victoria 3350 Richard Laufmann
Non-executive Director:
Australia Mike Etheridge
Web Site Company Secretary
www.ballarat-goldfields.com.au Amber Rivamonte
Shareholder Services Stock Exchange Listing
Computershare Investor Services Pty Australian Stock Exchange Code BGF
Limited
GPO Box 2975EE Alternative Investment Market(AIM)BGF
Melbourne
Victoria 3000 AIM Nominated Advisor
RFC Corporate Finance Ltd
Australia Level 14
Investor Enquires Tel: 1300 850 505 19-31 Pitt St
Tel: 03 9415 5000 Sydney, NSW
Fax: 03 9473 2500 Australia 2000
www.computershare.com
AIM Nominated Broker
Numis Securities
Cheapside House
138 Cheapside
London EC2V 6LH
United Kingdom
The full colour and formatted version or for further information:
please visit the company website (www.ballarat-goldfields.com.au)
Or contact Joel Forwood, Manager Corporate and Markets, on (03) 5327 1111.
Rule 5.3
Appendix 5B
Mining exploration entity quarterly report
Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.
Name of entity
BALLARAT GOLDFIELDS NL
ABN Quarter ended ("current quarter")
------------------- ------------------
50 006 245 441 March 2005
------------------- ------------------
Consolidated statement of cash flows
------------ ------------
Cash flows related to operating activities Current quarter Year to date
$A'000 (12 months)
$A'000
------------ ------------
------------
1.1 Receipts from product sales and related - -
debtors
1.2 Payments for (a) exploration and (4,188) (8,523)
evaluation
(b) development - -
(c) production - -
(d) administration (744) (1,729)
1.3 Dividends received - -
1.4 Interest and other items of a similar 232 759
nature received
1.5 Interest and other costs of finance - -
paid
1.6 Income taxes paid - -
1.7 Other (provide details if material) - -
------------ ------------
Net Operating Cash Flows (4,700) (9,493)
------ -------------------------- ------------ ------------
Cash flows related to investing
activities
1.8 Payment for purchases of: (a)prospects (200)
(b)equity investments
(c) other fixed assets (54) (697)
1.9 Proceeds from sale of: (a)prospects
(b)equity investments
(c)other fixed assets - -
1.10 Loans to other entities
1.11 Loans repaid by other entities
1.12 Other (provide details if material)
------------ ------------
Net investing cash flows (54) (897)
------------ ------------
1.13 Total operating and investing cash flows (4,754) (10,390)
------ (carried forward) ------------ ------------
--------------------------
1.13 Total operating and investing cash flows (4,754) (10,390)
------ (brought forward) ------------ ------------
----------------------
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, etc. 64 27,299
1.15 Proceeds from sale of forfeited shares
1.16 Proceeds from borrowings
1.17 Repayment of borrowings
1.18 Dividends paid
1.19 Other (provide details if material) (1,752)
------------ ------------
Net financing cash flows 64 25,547
------ ---------------------- ------------ ------------
Net increase (decrease) in cash held (4,690) 15,157
1.20 Cash at beginning of quarter/year to date 21,190 1,343
1.21 Exchange rate adjustments to item 1.20
------------ ------------
1.22 Cash at end of quarter 16,500 16,500
------ ---------------------- ------------ ------------
Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the related
entities
-------------
Current quarter
$A'000
-------------
-------------
1.23 Aggregate amount of payments to the parties included in 207
item 1.2 -------------
1.24 Aggregate amount of loans to the parties included in -
------ item 1.10 -------------
--------------------------------
1.25 Explanation necessary for an understanding of the transactions
-------------------------------------------
Item 1.23 includes salaries, director fees and superannuation paid to
directors during the quarter.
-------------------------------------------
Non-cash financing and investing activities
2.1 Details of financing and investing transactions which have had a material
effect on consolidated assets and liabilities but did not involve cash
flows
--------------------------------------------
N/A
--------------------------------------------
2.2 Details of outlays made by other entities to establish or increase their
share in projects in which the reporting entity has an interest
--------------------------------------------
N/A
--------------------------------------------
Financing facilities available
Add notes as necessary for an understanding of the position.
------------- -------------
Amount available Amount used
$A'000 $A'000
------------- -------------
3.1 Loan facilities - -
------------- -------------
3.2 Credit standby arrangements - -
----- ----------------------- ------------- -------------
Estimated cash outflows for next quarter
$A'000
------------------
4.1 Exploration and evaluation 7,000
------------------
4.2 Development -
----- ----------------------------- ------------------
Total 7,000
----- ----------------------------- ------------------
Reconciliation of cash
------------------------- ------------ -------------
Reconciliation of cash at the end of the quarter (as Current Previous
shown in the consolidated statement of cash flows) to quarter quarter
the related items in the accounts is as follows.
$A'000 $A'000
------------------------- ------------ -------------
-------------
5.1 Cash on hand and at bank 16,500 1,343
------------ -------------
5.2 Deposits at call
------------ -------------
5.3 Bank overdraft
------------ -------------
5.4 Other (provide details)
----- ---------------------- ------------ -------------
Total: cash at end of quarter (item 1.22) 16,500 1,343
----- ---------------------- ------------ -------------
Changes in interests in mining tenements
-------- --------------- -------- --------
Tenement Nature of Interest at Interest
reference interest beginning of at end of
quarter quarter
(note (2))
-------- --------------- -------- --------
6.1 Interests in mining
tenements
relinquished, reduced
or lapsed -------- --------------- -------- --------
6.2 Interests in mining
tenements acquired or
increased
-------- --------------- -------- --------
Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion rights
together with prices and dates.
-----------
Total Number Issue price per Amount paid
-------------- number quoted security (see up per
---------- ---------- note 3) (cents) security
(see note 3)
----------- (cents)
-----------
7.1 Preference
------ +securities ---------- ---------- ----------- -----------
(description)
----------
7.2 Changes during
quarter
(a) Increases
through issues
(b) Decreases
------ through returns ---------- ---------- ----------- -----------
of capital,
buy-backs,
redemptions
----------
7.3 +Ordinary 788,004,960 788,004,960
securities ---------- ---------- ----------- -----------
7.4 Changes during
quarter
(a) Increases 430,508 430,508 15 cents 15 cents
through issues 166,666 166,666 4.72 cents 4.72 cents
(b) Decreases
------ through returns ---------- ---------- ----------- -----------
of capital,
buy-backs
----------
7.5 +Convertible
debt securities ---------- ---------- ----------- -----------
(description)
7.6 Changes during
quarter
(a) Increases
through issues
(b) Decreases
------ through ---------- ---------- ----------- -----------
securities
matured,
converted
----------
7.7 Options Exercise Expiry
(description and price date
conversion
factor)
224,368,364 224,368,364 15 cents 30/9/2005
5,000,000 3.45 cents 30/9/2006
2,666,668 4.72 cents 30/9/2006
11,000,000 One third each 30/9/2007
at: 12 cents;
13 cents; 15
cents
respectively
2,000,000 17.25 cents 30/9/2007
5,000,000 15 cents 2/12/2007
---------- ---------- ----------- -----------
7.8 Issued during 5,000,000 15 cents 2/12/2007
quarter ---------- ---------- ----------- -----------
7.9 Exercised during 430,508 430,508 15 cents
quarter
166,666 - 4.72 cents
---------- ---------- ----------- -----------
7.10 Expired during - - - -
------ quarter ---------- ---------- ----------- -----------
----------
7.11 Debentures
(totals only)
------ ---------- ---------- ----------
7.12 Unsecured notes
(totals only) ---------- ----------
Compliance statement
1 This statement has been prepared under accounting policies which comply with
accounting standards as defined in the Corporations Act or other standards
acceptable to ASX (see note 4).
2 This statement does give a true and fair view of the matters disclosed.
Sign here:
Managing Director
Richard Laufmann
Date: 28 April 2005
Notes
1 The quarterly report provides a basis for informing the market how the
entity's activities have been financed for the past quarter and the effect on
its cash position. An entity wanting to disclose additional information is
encouraged to do so, in a note or notes attached to this report.
2 The "Nature of interest" (items 6.1 and 6.2) includes options in respect of
interests in mining tenements acquired, exercised or lapsed during the reporting
period. If the entity is involved in a joint venture agreement and there are
conditions precedent which will change its percentage interest in a mining
tenement, it should disclose the change of percentage interest and conditions
precedent in the list required for items 6.1 and 6.2.
3 Issued and quoted securities The issue price and amount paid up is not
required in items 7.1 and 7.3 for fully paid securities.
4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive
Industries and AASB 1026: Statement of Cash Flowsapply to this report.
5 Accounting StandardsASX will accept, for example, the use of International
Accounting Standards for foreign entities. If the standards used do not address
a topic, the Australian standard on that topic (if any) must be complied with.
== == == == ==
This information is provided by RNS
The company news service from the London Stock Exchange
END
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