RNS Number:8777G
Ballarat Goldfields N.L.
28 July 2006
Ballarat Goldfields NL
ACN 006 245 441
ASX and Media release: 28 July 2006
Quarterly Activities and Cash flow Report
For the 3 months ended 30 June 2006
Please see website www.ballarat-goldfields.com.au for the full colour quarterly
with all tables and photos referenced in this release.
SUMMARY
Mine Geology and Exploration
* Ballarat East Mineral Resource increased to 1.4 million ounces,
including an Indicated Mineral Resource of 0.24 million ounces.
* A more detailed geological understanding, identified by mapping and
initial stope reconciliation, has provided evidence that high grade gold
mineralisation is controlled by differing quartz vein types.
* Ballarat South test work commenced, with the treatment of stockpiled
material through a pilot plant.
* High grade gold intersections from drilling at Ballarat East include:
o 2m @ 31.2g/t
o 9m @ 7.7g/t
o 3m @ 11.9g/t
Underground Development
* Based on the Blue Whale fault discovery and the enhanced geological
understanding of the gold mineralisation at stope level, a revised mine
development plan and production ramp-up schedule is nearing completion. The
new plan is targeting higher production, from deeper, higher grade zones and
allows faster access to these areas.
* Underground development output has improved over previous quarters due
to continuous improvement in systems for developing through weak fault
zones. Further improvement is anticipated.
Stoping Trials
* Trials of two mining methods were successfully implemented in the first
ore block including the mining and extraction of 2 long hole stope panels
without excessive dilution.
* Access to the second and third ore-blocks is completed, with the
proximity of old workings slowing the rate of advance.
* To date, the stoping trials have produced over 600 tonnes of stockpiled
concentrate, with grades ranging from 14 - 230g/t. Approximately 8kg of free
gold and dore is in stock.
Corporate
* Cash balance at 30 June 2006 was $26 million.
* Balance of loan facility converted into equity.
MINE GEOLOGY AND EXPLORATION
Resource Update at Ballarat East
BGF announced a Mineral Resource upgrade from 1.1 million ounces to 1.4 million
ounces on 28 July, 2006. The updated resource estimate includes 0.24 million
ounces of Indicated Mineral Resource and 1.2 million ounces of Inferred Mineral
Resource. This resource estimate includes all information compiled by BGF to the
end of June 2006 and was reported in accordance in the 2004 Jorc Code and
independently audited by AMC Consultants.
The long section depicted in Figure 1 shows the distribution of the June 2006
resource, which exists on the First Chance Line at Ballarat East. There are now
over 1,400 assay results that are included in the total resource estimate, which
have identified a clear pattern of increasing grade with depth.
Figure 1: Long section of the 30 June 2006 resource estimate at Ballarat East.
Resources shown are on the First Chance line of mineralisation. Some additional
resources exist on adjacent lines of mineralisation known as the Sulieman line
and the Scandinavian line. The location of some recent drill intersections are
also shown.
Underground mapping uncovers high grade and low grade vein types
Previous interpretations of the gold populations in the Ballarat East system,
while acknowledging the impact of the coarse gold, did not differentiate the
coarse and fine grain populations, or the vein types that contain them.
An initial mapping program of the early stope development, which is still
ongoing, has revealed that the coarse gold is almost solely associated with flat
to east dipping veins that can extend away from the large west dipping faults.
(Photo 1 and Figure 2)
Simply put, it appears two separate events are responsible for the different
gold populations, with an earlier event carrying a largely low grade (and fine
grained) gold and a later event, responsible for the introduction of subsequent
gold bearing fluids, depositing higher average grades, and much of the coarse
gold.
Photo 1: 189 Woah Hawp crosscut.
Figure 2: Typical Section
image002 image003 image004 image005
This discovery is significant on many levels providing identifiable
mineralogical and structural guidance for stope delineation and grade
estimation. It now appears that drill hole assay data, averaging below
approximately 3g/t and devoid of east dipping veins is going to be comprised of
largely low grade material, with little nugget upgrade. In contrast, drill hole
assay data, supported by grades above 3g/t confirm the existence of the high
grade material.
This significantly enhances BGF's ability to delineate high grade areas for mine
development and production.
To date mining has occurred in both vein types. The distribution of gold from
areas hosting flat east dipping veins closely supports BGF's earlier published
gold distribution. (Photo 2)
image007
Photo 2: Gold distribution from test data (top), gold distribution from 189
Stope (bottom).
Most of the existing resources calculated contain populations of flat to east
dipping veins, with high grade assay results. The large low grade resources that
do not appear to have any high grade quartz veins have now been removed from the
resource estimate. BGF believes that by focussing on high grade east dipping
veins will ensure that the head grade will continue to rise. Current drilling
results clearly show that gold grades increase dramatically at depth, away from
the old workings (see Figure 1).
Exploration drilling
Underground diamond drilling in the June quarter has continued to identify
extensive gold mineralisation associated with the Mako fault. The Mako fault was
found to contain very high grades near the Blue Whale Fault in the southern part
of the field. To the north, the Mako fault moves away from the Blue Whale fault,
and contains lower grades, but is still one of the most extensively mineralised
faults found to date at Ballarat East.
A second drill rig was employed on the surface, some 500m north of the current
limit of the decline at Ballarat East. This drilling program was designed to
test two exploration targets which exist in close proximity to the position of
the planned decline. Results from this exploration program confirmed the
presence of high grade gold mineralisation at both target locations, with the
best result of 3m @ 11.9g/t.
Significant assay results from the June quarter are summarised in table below.
Hole number Down hole depth (m) Width (m)* Grade g/t Location
BEU108C 329m to 331m 2m 31.2g/t Mako Fault
---------- ---------------- --------- -------- -------------
BEU108E 283m to 289m 6m 5.0g/t Mako Fault
---------- ---------------- --------- -------- -------------
BEU125 229m to 306m 7m 3.9g/t Tiger Fault
---------- ---------------- --------- -------- -------------
BEU125 342m to 351m 9m 7.7g/t Mako Fault
---------- ---------------- --------- -------- -------------
BEU125A 368m to 377m 9m 2.7g/t Mako Fault
---------- ---------------- --------- -------- -------------
BED017 263m to 265m 2m 4.63g/t Hammerhead Fault
---------- ---------------- --------- -------- -------------
BED017 329m to 332m 3m 11.9g/t Gummy Fault
---------- ---------------- --------- -------- -------------
*All of the intersections reported have been adjusted for their estimated true
widths.
BGF has made the transition from contractor to owner operator for its drilling
activities. The initial set-up has been successfully completed with both
productivity and cost improvements. BGF anticipates that the transition to owner
operator will reduce drilling costs by in excess of 20%.
Ballarat South
The first test parcels of Ballarat South material (that was stockpiled during
the construction of the tailings storage facility) were treated through a pilot
scrubbing and screening plant installed adjacent to the gravity recovery plant.
image008
Photo 3: Pilot Scrubbing Plant and Quartz stockpile
The purpose of undertaking this test work is to confirm early work by CRA. This
indicated it was possible to significantly upgrade low grade shallow material by
screening and washing clay and loose sedimentary material away from gold bearing
quartz rock.
The remaining quartz material could be subsequently processed through BGF's
process plant. Initial results have been very encouraging.
Ballarat West
A seismic reflection survey was conducted by BGF in partnership with ANSIR (a
national research facility for earth sounding) at Ballarat West during the
quarter. BGF conducted research to test the ability of seismic reflection to
discover gold bearing structures under the basalt cover at Ballarat West.
Techniques such as seismic reflection are typically used to identify structures,
which could enable geologists to predict the location of potentially mineralised
zones.
There have been a number of advances in seismic reflection technology, which in
the past could not effectively penetrate through thick layers of basalt. BGF
believe that seismic reflection could now work successfully through the basalt
cover. Success with this study could have enormous implications, and provide a
technique for discovery in areas that have never been tested.
Photo 4: Seismic reflection trucks at Ballarat.
Berringa
Drilling commenced during the quarter at Berringa, with a total of 1,735m
drilled. A number of quartz rich faults were intersected, with some sightings of
fine visible gold.
BALLARAT EAST PROJECT Development
Review of Underground Development Plan
Following recent discoveries, BGF's geological model appears more robust than
before. We now believe we have a reliable predictor of the presence of high
grade gold, and clear support for the improvement in grade evident from drilling
at depth.
The improved understanding of the Ballarat East orebodies, and the presence of
un-mapped historical workings in the shallow ore bodies, has resulted in BGF
concluding that these orebodies are not attractive as early production sources.
Consequently, a revised development plan and ramp-up schedule now focuses on
access to the more clearly defined, deeper, high grade orebodies well below the
historical workings.
Further details of the revised development plan and production schedule,
targeting a production rate of 250,000 ounces per annum by 2009, will be
released within the next few weeks.
Underground Mine Statistics
Sept Qtr 05 Dec Qtr 05 Mar Qtr 06 Jun Qtr 06 YTD FY06
U/G Decline
Development
(m) 478 546 584 691 2,299
Ore Tonnes 2,357 6,737 6,519 3,993 18,618
Decline Development
Underground mine development remains focussed on the Sulieman decline to the
north and the Woah Hawp decline to the south.
The Sulieman decline design required modification during the quarter to avoid an
area of weak ground which resulted in a delay to advance while the new path was
evaluated. Advance rates have been improving with the new location of the
decline.
Development advance rates in the Woah Hawp decline continued at slower rates as
an increased amount of ground support was installed in order to negotiate the
faults and cross course structures in the southern end of the field.
Trial Mining
Mining is currently only underway within the 189 Woah Hawp ore block. This block
is located in the upper level of the mine in a window within the historical
workings.
A drive along the base of the ore body was completed in low grade ore in May
2006.
The 189 Woah Hawp trial mining block has been successfully excavated using two
mining methods, cut and fill and long hole open stoping. The information
gathered from these trials is being utilised to define the mine planning
parameters for future stoping.
Further mining trials will be conducted in the 218 Woah Hawp and 176 Sulieman
ore blocks. The 218 Woah Hawp has been accessed by a crosscut to allow
geological mapping to be undertaken. The ore drive placement has been determined
from close spaced diamond drilling which has also been used to determine the
extent of old workings in the area.
Development to the 176 Sulieman ore block was advanced to its hold position to
allow for dewatering and ore delineation diamond drilling prior to mining.
Mine Infrastructure
Preparation has been undertaken during the quarter for the next underground vent
raise and for the installation of the North Woah Hawp dewatering pump to a depth
of 420m below surface.
The site power supply was also upgraded during the period.
image009
Photo 5: 189 Woah Hawp Long Hole Stope.
COPORATE AND FINANCE
Finance
The cash balance at 30 June 2006 was $26 million.
On 26 April, the outstanding balance of BGF's debt facility (principal and
interest) with Investec Bank (Australia) Limited was converted into 22,174,612
shares in BGF at a conversion price of A$0.25 per share.
Changes to the Board of Directors
Following the decision of the Chairman, Mr Colin Smith, to retire on 31 July
2006, it was announced that Mr Alister Maitland will take over as Chairman from
that date. Mr Maitland has been a Non-executive Director of BGF since July 2005.
Mr Wojciech ("Voytek") Ozga, General Manager Operations, was appointed to the
Board as an Executive Director. He has assumed the role of Director of
Operations.
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.
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, 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 a Total resource
of 1.4 million ounces, including 0.24 million ounces of indicated resource, 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 Chairman
10 Woolshed Gully Drive Colin Smith Managing Director
Mt Clear Victoria 3350 Richard Laufmann Director of
Operations
Australia Wojciech Ozga Non-executive
Director
Mike Etheridge Non-executive
Director
Alister Maitland
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 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: 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 June 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 (10,523) (33,056)
evaluation
(b) development - -
(c) production - -
(d) administration (569) (2,926)
1.3 Dividends received - -
1.4 Interest and other items of a similar 485 1,596
nature received
1.5 Interest and other costs of finance paid (144) (1,035)
1.6 Income taxes paid - -
1.7 Other (provide details if material) - -
------------ ------------
Net Operating Cash Flows (10,751) (35,421)
------ -------------------------- ------------ ------------
Cash flows related to investing
activities
1.8 Payment for purchases of: (a)prospects (5,815) (26,983)
(b)equity investments
(c) other fixed assets
1.9 Proceeds from sale of: (a)prospects - 37
(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 (5,815) (26,946)
------------ ------------
1.13 Total operating and investing cash flows (16,566) (62,367)
------ (carried forward) ------------ ------------
--------------------------
1.13 Total operating and investing cash flows (16,566) (62,367)
------ (brought forward) ------------ ------------
----------------------
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, 5,544 84,030
etc.
1.15 Proceeds from sale of forfeited shares
1.16 Proceeds from borrowings - 12,000
1.17 Repayment of borrowings (5,536) (12,000)
1.18 Dividends paid
1.19 Other (provide details if material) (100) (4,634)
------------ ------------
Net financing cash flows (92) 79,396
------ ---------------------- ------------ ------------
Net increase (decrease) in cash held (16,658) 17,029
1.20 Cash at beginning of quarter/year to date 46,624 8,937
1.21 Exchange rate adjustments to item 1.20
------------ ------------
1.22 Cash at end of quarter 25,966 25,966
------ ---------------------- ------------ ------------
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 103
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 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 25,966 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) 25,966 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 MIN5444 New Mining NIL 100%
tenements -------- Licence -------- --------
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 1,188,153,935 1,188,153,935
securities ---------- ---------- ----------- -----------
7.4 Changes 22,174,612 22,174,612 25 cents 25 cents
during
quarter
(a) Increases
through
issues
(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 5,000,000 Exercise Expiry date
(description price
and
conversion
factor)
2,500,000 3.45 cents 30/9/2006
11,000,000 4.72 cents 30/9/2006
1,500,000 One third 30/9/2007
each at: 12
cents; 13
cents; 15
cents
respectively
3,750,000 17.25 cents 30/9/2007
1,500,000 15 cents 2/12/2007
25 cents 30/9/2008
---------- ---------- ----------- -----------
7.8 Issued during
quarter ---------- ---------- ----------- -----------
7.9 Exercised
during ---------- ---------- ----------- -----------
quarter
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 July 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
END
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