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SAVANNAH GOLDFIELDS LIMITED Capital/Financing Update 2005
65880_rns_2005-12-06_2e5cb7a2-19de-43eb-9678-c8a203a7aa90.pdf
Capital/Financing Update
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ACN 003 049 714
Mail Address GPO Box 5268 Brisbane Old 4001
Street Address Level 5, 60 Edward Street Brisbane Old 4000
Phone: (07) 3303 0630 Fax: (07) 3303 0601 Email: [email protected]
ASX ANNOUNCEMENT - 7 DECEMBER 2005
TOM'S GULLY GOLD MINE UPDATE:
FURTHER HIGH GRADE GOLD DRILLING INTERCEPTS
MINE DEVELOPMENT CONTINUES ON SCHEDULE
The Company is pleased to provide an update on progress at the Company's 100% owned Tom's Gully Gold Mine in the Northern Territory where the underground mine development is continuing on schedule and further high grade gold drilling results have been achieved from the current drilling programme.
IN-FILL AND STEP OUT DRILL PROGRAMME
The Company recently completed a 7,500 metre drilling programme at Tom's Gully which had the twin objectives of converting a substantial part of the current inferred resource to the indicated resource category and also increasing the overall resource. The resource, without the inclusion of the current drilling programme results, is 1.8 million tonnes at $8.1\$ g/t for 470,000 ounces of gold comprising an Indicated Resource of 690,000 tonnes at 7.6g/t gold and an Inferred Resource of 1.13 million tonnes at 8.3g/t gold.
The reef was intersected by all 20 holes which went to target depth with ground conditions excellent throughout. Results from all but five of the holes in the programme have been previously announced.
Assay results are now to hand for the last five drill holes of the programme. Three of these (TGD 433,436, $\&$ 437) are step-out holes extending over 200 metres to the south of the current resource. The results are very encouraging and indicate a continuation of mineralisation to the south of the current resource area with the southern most drill hole TGD437 intersecting 2.7 $m$ at 12.6 g/t gold and TGD433 intersected 1.7 $m$ at 8.5 g/t gold along trend from previously drilled hole TGD 374 $(1.9m \text{ at } 15.3 \text{ g/t}).$
TGD 434 was not drilled in the same location as the "step out" holes but was located just south of the previously mined open pit where re-interpretation of previous drill data indicated potential for mineralised reef to occur where it's presence had previously been discounted. TGD 434 was an extension of a previously drilled de-watering bore and the result, 0.9m at 8.4 $g/t$ gold is particularly encouraging as the first part of the reef had been already been drilled away by the drilling of the water bore and the reef thickness intersected by the diamond tail is therefore a minimum thickness.
ACN 003 049 714
| Hole ID | North ÷ |
East* | RL* | Dip. | From | To | Interval | Gold g/t |
|---|---|---|---|---|---|---|---|---|
| TGD433 | 3,850 | 14,33 | 1,040 | $-90$ | 272.7 | 274.4 | 1.7 | 8.5 |
| TGD434 | 4,900 | 14,66 | 1,030 | -90 | 134.6 | 135.5 | $0.9**$ | 8,4 |
| TGD436 | 3,760 | 14,25 | 1,038 | $-90$ | 271.8 | 273.9 | 2.1 | 4.9 |
| TGD437 | 3.700 | 14.18 л |
1,041 | -90 | 289.3 | 292.0 | 2.7 | 12.6 |
*Positions approximate – not yet surveyed.
** Minimum thickness
Step out hole, TGD 435 was located approximately 200m to the east of the Crabb Fault in a newly targeted area away from known mineralization. 2.5m of reef was intersected with the hole but it was not mineralised. Nevertheless, it is encouraging that the reef has been located in an area previously considered un-prospective.
The results from the 15 holes previously received in the programme are set out in the attached appendix. A map showing the location of the drill holes from the current program is also attached.
A revised JORC resource estimate will now be undertaken and should be available in February 2006.
MINE DEVELOPMENT CONTINUES ON SCHEDULE
Following commencement of underground mining in October, the decline portal has been completed and the decline development is on schedule with over 215 metres of decline development completed. First ore is expected to be mined in January 2006.
The processing plant refurbishment and expansion works are also continuing on schedule with plant commissioning scheduled for March 2006.
The mine is being operated under an Alliance Agreement with PT Petrosea Tbk which is also providing mobile and fixed underground mining plant and equipment.
The mine is likely to benefit significantly from the recent increase in the gold price. The feasibility studies undertaken by the Company prior to making a decision to develop the mine assumed an A\$540 per ounce gold price compared to the current A\$ gold price of approximately A\$670 per ounce.
Further updates on progress of the mine development at Tom's Gully will be made as milestones are reached.
ACN 003 049 714
BACKGROUND ON TOM'S GULLY
The Company is developing the Tom's Gully Gold Mine as a 240,000 tonnes per annum Based on the feasibility study, the first stage of the development at Tom's underground mine. Gully has an initial mine life of 5 years, mining and processing 1.2 million tonnes at 7.2 $g/t$ gold diluted head grade to produce an average 45,000 ounces per annum. The development of Tom's Gully as an underground mining operation represents the first phase of development of Renison's Northern Territory gold assets which are targeted for later expansion to over 60,000oz pa gold production from open cut mining, tailings re-treatment and increased recoveries through changes to the treatment route.
The Tom's Gully mine development, together with the new discovery of coal at Arrawatta, progress on the Ashford Coking Coal project in NSW and the current drilling program at the Agate Creek gold project in north Oueensland continues the Company's rapid development as an emerging mining group.
For and on behalf of the Board
JPK Marshall Company Secretary
For further information contact: Richard Seville or Stephen Bizzell Phone: (07) 3303 0630 E-Mail: [email protected]
David Waterhouse Waterhouse Investor Relations Phone: 0407 880 937
The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr Scott Hall who is a member of the Australian Institute of Mining and Metallurgy. Mr Hall is a full-time employee of Renison Consolidated Mines NL. Mr Hall has sufficient experience which is relevent to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results. Mineral Resources and Ore Reserves.' Mr Hall consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
ACN 003 049 714
ACN 003 049 714
APPENDIX
Significant results from the current drilling program (previously released):
| Hole ID | North | East * | RIP | Dio | From | $T\circ$ | Interval | Gold |
|---|---|---|---|---|---|---|---|---|
| $\mathfrak{g}/\mathfrak{g}$ | ||||||||
| TGD 388 | 4,607 | 14,49 3 |
1,049 | $-90-$ | 236.4 | 240.0 | 3.6 | 4.5 |
| TGD423 | 4,140 | 14,35 8 |
1,040 | -90 | 270.0 | 271.7 | 1.7 | 6.5 |
| TGD424 | 4,136 | 14,46 0 |
1,045 | $-90-$ | 274.0 | 276.2 | 2.2 | 10.7 |
| 14,55 | ||||||||
| TGD427 | 4,320 | 0 | 1,050 | $-90$ | 261.1 | 262.8 | 1.7 | 9.0 |
| 14,51 | ||||||||
| TGD429 | 4,140 | 0 | 1,045 | -90 | 267.5 | 269.0 | 1.5 | 11.3 |
| 272.0 | 275.0 | 3.1 | 4.9 | |||||
| 14,25 | ||||||||
| TGD432 | 3,860 | 0 | 1,040 | $-90$ | 273.5 | 275.8 | 2.3 | 7.6 |
| 14,51 | ||||||||
| TGD 416 | 4,234 | 6 14,43 |
1,050 | -90 | 268.8 | 270.1 | 1.3 | 15.3 |
| TGD 419 | 4,244 | 6 | 1,040 | $-90$ | 266.9 | 270.9 | 4.0 | 5.8 |
* Positions approximate - not yet surveyed.