RNS Number:9936B
Ballarat Goldfields N.L.
25 April 2006
Ballarat Goldfields NL
ASX and Media release: 26 April 2006
Quarterly Activities and Cash flow Report
For the 3 months ended 31 March 2006
SUMMARY
Construction
* Gravity process plant successfully commissioned. Early performance is
exceeding design. Gravity sulphide concentrate is being stockpiled on site
for later processing.
* The tailings storage facility, completed during the quarter, is being
commissioned.
Underground Development
* Ballarat Goldfields recorded its highest development advance for a
quarter, 584 metres.
* Development productivity is being affected by poor ground conditions in
areas of weak fault zones.
* A third jumbo was introduced at the end of the quarter to accelerate
development.
* Tenders were invited for the extension of the Southern "Woah Hawp"
decline ventilation system.
Mine Production
* Production from the upper levels is being slowed due to unexpected old
workings. This will be rectified as deeper ore sources are accessed below
the old workings.
* Development delays and old stope voids are expected to have an effect on
the early ramp up of production. However, the longer term target of
200,000oz per annum is still expected to be achieved by mid 2008.
Mine Geology and Exploration
* Discovery of the Blue Whale fault is a significant breakthrough in the
understanding of the control of higher grade gold mineralisation at depth at
Ballarat East.
* High grade gold intersections from drilling at Ballarat East include:
o 3.5m @ 11.6g/t
o 16.0m @ 7.3g/t
o 2.5m @ 7.3g/t
Corporate
* Cash balance at 31 March 2006 was $42.6 million.
* General Meeting successfully ratified the equity placement in November.
* Mark Davies was appointed Manager - Metallurgy.
BALLARAT EAST PROJECT DEVELOPMENT
Construction
Ballarat Goldfields gravity process plant (Photo 1) was successfully
commissioned during the quarter. The unique plant design, primarily focused on
gravity concentration, was chosen to take advantage of the coarse gold
characteristics of the field. The plant has a planned initial throughput rate of
600,000 tpa.
The front end of the plant consists of a two stage crushing circuit which is
already achieving operating rates in excess of 1 million tonnes per annum. The
crushed product is stored in a 500 tonne bin, with provision for the
installation of a second bin in the future.
The crushing circuit feeds a closed circuit gravity recovery system comprising
tertiary crushing, via Vertical Shaft Impactor (VSI), and a series of Gekko
rougher and scavenger InLine Pressure Jigs. Additional chutes have been
installed for the expansion of the tertiary crushing circuit and trials will be
undertaken to determine if a further VSI or High Pressure Grinding Rolls (HPGR)
will be used for this expansion.
During commissioning, 11,027 tonnes of low grade ore were treated through the
process plant.
This above circuit is designed to remove approximately 5% of the total feed, as
a gravity concentrate, made up of liberated heavier material comprising free
gold and gold bearing sulphides. Current indications are that gravity
concentrate recovery is operating better than design, with tail grades lower
than anticipated, to date.
The gravity concentrate is pumped to the gold room, where very coarse gold is
removed via Wilfley and Gemini tables and a gold bearing sulphide concentrate is
currently being stockpiled
Test work on the sulphide concentrate will allow us to finalise the
specifications for the treatment of this material, currently planned around the
installation of a Gekko Intensive Cyanidation Leach Reactor (ILR).
Tailings storage facility
The tailings (fine grain sand) will be deposited in a tailings storage facility
("TSF"). Construction of the TSF was completed in the quarter and is currently
being commissioned.
UNDERGROUND DEVELOPMENT
Sept Qtr 06 Dec Qtr 06 Mar Qtr 06 YTD FY06
Underground Decline
Development (m) 478 546 584 1,608
Underground mine development remains currently focussed on the Sulieman decline
to the north and the Woah Hawp decline to the south
Development rates have continued to improve despite both development headings
intersecting significant cross course faults which slowed their progress during
the quarter.
The Sulieman decline, currently 235m below the surface, continues to be mined
towards the north to establish drill platforms for resource definition and
access to the northern part of the field. .The 176 Sulieman Access was commenced
during the quarter, off the Sulieman Decline, to access mineralisation
identified from recent drilling.
Development advance in the Woah Hawp decline, 242m below the surface, was
impacted by mining the southern primary vent chamber along with 2 cross cuts to
future mining blocks and intersecting a cross course fault.
The development rate has improved for the third consecutive quarter,
nevertheless, due to regular encounters with cross course faults, the access to
the new ore sources is being delayed. BGF now expects the initial production
ramp up to be slower than expected.
To accelerate development a third jumbo commenced commissioning at the end of
the quarter.
Tenders were invited to upgrade the ventilation system at the southern end of
the mine. Initial plans include an internal extension of the New Prince Extended
ventilation shaft.
Two surface dewatering holes were successfully cased through old shafts to allow
for dewatering of the old workings. The first Underground dewatering station is
currently being commissioned at a depth of 250 metres and is expected to be
capable of extracting 2 Megalitres of water per day.
MINE PRODUCTION
Sept Qtr 06 Dec Qtr 06 Mar Qtr 06 YTD FY06
Ore Tonnes 2,357 6,737 6,519 15,607
Mining is currently only underway within the 189 Woah Hawp stope. This block
(photo 4) is located in the upper level of the mine in a window within the
historical workings.
A total of 6,519 tonnes of low grade ore was extracted from the 189 Woah Hawp
South access during the quarter. This block is showing mineralisation wider than
indicated from diamond drilling, requiring some redesign.
Late in the quarter, an intersection with old workings, which had not been
modelled or intersected in exploration drilling, delayed production and reduced
the tonnage available.
The discovery of mined out areas that were not mapped or detected in exploration
drilling will result in lower near term production during the ramp up phase.
However, the longer term target of 200,000 oz per annum by mid 2008 is not
expected to be effected because:
* Ore shoots have been located to the north near the current level of
the Sulieman decline in an area where there had been a low probability placed on
economic mineralisation; and,
* the breakthrough in the understanding of where high grade mineralisation
is located with the discovery of the Blue Whale fault and its future
implications for production scheduling.
BGF is currently reviewing its mine plan and expects to be able to provide
further guidance on the production schedule in the June Quarterly report.
MINE GEOLOGY AND EXPLORATION
Blue Whale fault.
As reported, BGF believes it has achieved a significant breakthrough in its
understanding of the higher grade gold mineralisation located at depth at
Ballarat East, with the discovery of a large fault system, named the Blue Whale
fault.
The Blue Whale fault is considered to be the source of the gold bearing fluids
and hence controls the location of the higher grade gold mineralisation.
The Blue Whale fault may also control the depth limit of gold mineralisation at
Ballarat East and is some 600 metres deep at the southern end of the Ballarat
East field and is interpreted to plunge to over 1500 metres at the northern end.
The depth extent of the current mine plan is 800 metres.
BGF is confident that this discovery will have a positive impact on the expected
gold grade to be recovered at depth from Ballarat East, however there is
currently insufficient data to quantify what the full impact may be. As a
consequence, BGF is reviewing the current mine plan and the focus of its
Ballarat East and Ballarat West exploration efforts.
Underground definition drilling
Diamond drilling continued at Ballarat East, with two drill rigs focussed on
regional resource definition and a third drill rig focussed on stope definition.
The regional drilling program was restricted by drill site availability, with
the bulk of the drilling on shallower targets close to the decline. The best
drilling results came from the Hammerhead fault within close proximity to the
existing decline.
Significant assay results from the March quarter are summarised in Table 1.
Hole number Down hole depth (m) Width (m)* Grade g/t Location
BEU109 263 to 267 3.5 11.58 Hammerhead Fault
---------- ---------------- --------- -------- -------------
BEU110 259 to 278 16.0 7.27 Hammerhead Fault
---------- ---------------- --------- -------- -------------
BED009B 309 to 312 2.5 7.3 Fold related
---------- ---------------- --------- -------- -------------
Table 1: Significant assay results received in the March quarter 2006.
*All of the intersections reported have been adjusted for their estimated true
widths.
Other Exploration
Ballarat West
BGF commenced a detailed reconstruction of the historical Ballarat West mines.
This program is similar to the reconstruction program completed several years
ago for Ballarat East.
Berringa
Site preparation was undertaken prior to a drilling program, which commenced
during April.
Ballarat South
Initial preparations are being made in order to conduct metallurgical testing of
stockpiled material from Ballarat South.
COPORATE AND FINANCE
Finance
The cash balance at 31 March 2006 was $42.6 million.
General Meeting
Ballarat Goldfields NL (BGF) held a General Meeting on Monday 27 March 2006. The
purpose of the meeting related to BGF's obligation, under its loan facility with
Investec Bank (Australia) Limited, to maintain sufficient capacity to enable
Investec to convert part or all of its existing loan to BGF into fully paid
ordinary shares, should it wish to do so.
On 21 February 2006, BGF issued 1,855,999 shares to Investec following a loan
conversion request. This effectively used up the balance of BGF's issuance
capacity, under ASX Listing Rules, following the placement of 150,000,000 fully
paid ordinary shares on 28 November 2005.
The resolution to ratify the placement in November 2005 was passed and therefore
effectively, "refreshed" BGF's issuance capacity enabling it to comply with any
future conversion requests for part, or all, of the balance of the loan
facility.
Key management appointment
Mark Davies was appointed Manager - Metallurgy. Mark has over 20 years
experience in mineral processing and extractive metallurgy of gold and base
metals. He joins us from BHP Billiton's Olympic Dam operation where he held the
position of Refinery Manager responsible for copper cathode and gold production.
Mark also worked in a number of operational and technical roles in the
concentrator and hydrometallurgical plants at Olympic Dam. Prior to this he
worked with WMC Resources in Western Australia at their nickel and gold
operations in Kalgoorlie, Kambalda, and Leinster.
Mark is a graduate from the University of Ballarat. His interest in the mining
history of the area was the driving force behind his decision to practice
metallurgy and he now welcomes the opportunity to contribute to the success of
the modern mining era of Ballarat.
BACKGROUND INFORMATION
Ballarat East Project Summary
Situated in one of the most famous historical gold mining regions of Australia,
Ballarat produced over 12 million ounces before it's premature closure, around
the time of the first world war.
In 2004, for the first time following discovery in the 1850's, the leases over
the entire Ballarat field were consolidated under the sole ownership of BGF.
This has resulted in the company constructing a comprehensive geological model
of the entire field, demonstrating what many had suspected, that Ballarat had
massive unexplored prospectivity.
Following a pre-feasibility study, based on BGF's geological model , underground
development at Ballarat East recommenced in December 2004. The plan, proposed an
initial underground mine at Ballarat East, with twin access declines servicing
the haulage and ventilation. The mine, would have a life of 21 years, ramping
to an average production rate of approximately 200,000 ounces per annum.
In line with this plan, drilling has continued to increase confidence in the
geological model. Development of the mine and associated process plant is
continuing as planned, with stage 1 of the process plant now commissioned.
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.
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 )
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. . The terms Exploration Results,
Mineral Resources and Exploration Potential are used in accordance with their
definitions in the 2004 JORC Code, which is available at www.jorc.org.
CORPORATE DIRECTORY
Registered and Principal Office Directors
10 Woolshed Gully Drive Colin Smith Chairman
Mt Clear Victoria 3350 Richard Laufmann Managing Director
Australia Mike Etheridge Non-executive
Director
Alister Maitland Non-executive
Director
Web Site Amber Rivamonte Company Secretary
www.ballarat-goldfields.com.au
Shareholder Services Stock Exchange Listing
Computershare Investor Services Pty Australian Stock Exchange Code BGF
Limited
GPO Box 2975EE Alternative Investment Market(AIM)BGF
Melbourne AIM Nominated Advisor
Victoria 3000 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
For further information, including this release with all pictures: please visit
the company website (www.ballarat-goldfields.com.au)
Or contact Joel Forwood, Manager Corporate and Markets, on (03) 5327 1111.
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 2006
------------------- ------------------
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 (7,002) (22,534)
evaluation
(b) development - -
(c) production - -
(d) administration (747) (2,357)
1.3 Dividends received - -
1.4 Interest and other items of a similar 976 1,111
nature received
1.5 Interest and other costs of finance paid (136) (891)
1.6 Income taxes paid - -
1.7 Other (provide details if material) - -
------------ ------------
Net Operating Cash Flows (6,909) (24,671)
------ -------------------------- ------------ ------------
Cash flows related to investing
activities
1.8 Payment for purchases of: (a)prospects
(b)equity investments
(c) other fixed assets (4,403) (21,169)
1.9 Proceeds from sale of: (a)prospects
(b)equity investments
(c)other fixed assets 37 37
1.10 Loans to other entities
1.11 Loans repaid by other entities
1.12 Other (provide details if material)
------------ ------------
Net investing cash flows (4,366) (21,132)
------------ ------------
1.13 Total operating and investing cash flows (11,275) (45,803)
------ (carried forward) ------------ ------------
--------------------------
1.13 Total operating and investing cash flows (11,275) (45,803)
------ (brought forward) ------------ ------------
----------------------
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options,
etc. 759 78,487
1.15 Proceeds from sale of forfeited shares
1.16 Proceeds from borrowings 12,000
1.17 Repayment of borrowings (464) (6,464)
1.18 Dividends paid
1.19 Other (provide details if material) (303) (4,534)
------------ ------------
Net financing cash flows (8) 79,489
------ ---------------------- ------------ ------------
Net increase (decrease) in cash held (11,283) 33,687
1.20 Cash at beginning of quarter/year to date 53,907 8,937
1.21 Exchange rate adjustments to item 1.20
------------ ------------
1.22 Cash at end of quarter 42,624 42,624
------ ---------------------- ------------ ------------
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 299
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 5,536 5,536
------------- -------------
3.2 Credit standby arrangements - -
----- ----------------------- ------------- -------------
Estimated cash outflows for next quarter
$A'000
------------------
4.1 Exploration and evaluation 10,000
------------------
4.2 Development -
----- ----------------------------- ------------------
Total 10,000
----- ----------------------------- ------------------
Reconciliation of cash
------------------------- ------------ -------------
Reconciliation of cash at the end of the quarter Current Previous
(as shown in the consolidated statement of cash quarter quarter
flows) to the related items in the accounts is as
follows.
$A'000 $A'000
----- ---------------------- ------------ -------------
5.1 Cash on hand and at bank 42,624 42,624
------------ -------------
5.2 Deposits at call
------------ -------------
5.3 Bank overdraft
------------ -------------
5.4 Other (provide details)
----- ---------------------- ------------ -------------
Total: cash at end of quarter (item 1.22) 42,624 42,624
----- ---------------------- ------------ -------------
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 Number quoted Issue price Amount paid
-------------- ---------- ---------- per security up per
(see note 3) security
(cents) (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 1,165,979,323 1,165,979,323
securities ---------- ---------- ----------- -----------
7.4 Changes
during
quarter
(a) Increases 333,333 333,333 17.25 cents 17.25 cents
through 1,855,999 1,855,999 25 cents 25 cents
issues 1,250,000 1,250,000 15 cents 15 cents
166,667 166,667 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 date
(description price
and
conversion
factor)
5,000,000 3.45 cents 30/9/2006
2,500,000 4.72 cents 30/9/2006
11,000,000 One third 30/9/2007
each at: 12
cents; 13
cents; 15
cents
respectively
1,500,000 17.25 cents 30/9/2007
3,750,000 15 cents 2/12/2007
1,500,000 25 cents 30/9/2008
---------- ---------- ----------- -----------
7.8 Issued during
quarter ---------- ---------- ----------- -----------
7.9 Exercised 333,333 17.25 cents 30/9/2007
during
quarter
166,667 4.72 cents 30/9/2006
1,250,000 15 cents 2/12/2007
---------- ---------- ----------- -----------
7.10 Expired 166,668 - 17.25 cents 30/9/2007
------ 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: 26 April 2006
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 Flows apply to this report.
5 Accounting Standards ASX 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
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