CGA Mining Limited - September Quarterly Activities Report
/NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR RELEASE TO US NEWS
WIRE SERVICES/
PRODUCTION INCREASED BY 130% TO APPROXIMATELY 30,000 OUNCES FOR THE
SEPTEMBER QUARTER
PLANT IS NOW MATERIALLY EXCEEDING DESIGN WITH CURRENT THROUGHPUT AT
APPROXIMATELY 600dth
ANNOUNCEMENT TO THE AUSTRALIAN SECURITIES EXCHANGE AND TORONTO STOCK
EXCHANGE
HIGHLIGHTS
- Production increased by 130% to approximately 30,000 ounces for the
quarter.
- Plant is now materially exceeding design expectations - current
throughput at approximately 600dth (design 500dth).
- On track to achieve steady state production during the December
quarter.
- Ball Mill No.2 successfully commissioned in mid September.
- Plant availability increased from 73.8% to 93.5%.
- Metallurgical recovery increased from 76% to 82.1%.
- Safety - zero LTI's for the September quarter.
- Average realised gold sale price of US$964/ounce.
- Significant high grade drilling results announced in the quarter at
the Segilola Project.
- Cash on hand at 30 September was US$14.5M.
- Successful placement of C$25M - due to close end of October.
MASBATE PROJECT UPDATE
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Production Summary
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Cash
Oper-
ating
Average Plant Total Costs
Ore Grade Ore Head Reco- Avail- Prod- (Before
Mined Mined Milled Grade very ability uction taxes)
(t) (g/t Au) (t) (g/t Au) (%) (%) (oz Au) (US$/oz)
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September
Quarter 764,665 1.65 839,503 1.37 82.1 84.6 29,751 578
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The operating statistics during the quarter reflect a continued focus on commissioning and production ramp up. With Ball Mill No. 2 only being commissioned late in the quarter, feed to the plant reflected in part a selection and mix of ore to ensure the grinding circuit was optimised with blends focused on achieving throughput and grind.
Overall cash operating costs per tonne milled for the month of September were US$19.71/t and for the quarter US$21.37/t.
Cash operating costs per ounce were impacted by the large amount of pioneering work undertaken during the quarter, the feeding of low grade stock piles whilst additional mining faces were established and the lower throughput rates (prior to the commissioning of Ball Mill No.2 late in the quarter).
Steady state production is expected to be achieved in the December quarter.
Commissioning Update
The Masbate plant throughput continued to increase during the quarter, with a progressive improvement in mill availability. Ball Mill No.2 was successfully commissioned during September, this completed the major work associated with the grinding circuit.
Plant availability rose materially from 73.8% for the month of July to 93.5% in September.
Since the commissioning of the second ball mill throughput has also been steadily increasing, at the end of the quarter throughput was at approximately 600dtph, which is significantly in excess of design capacity.
Safety
Masbate continued its successful commencement of operations with zero Lost Time Injuries ("LTI") recorded and finished the quarter with 92 days LTI free. This safe record continues on from the construction phase which recorded 109 days LTI free prior to the commencement of operations.
Training and Development of staff focussed on hazard identification and risk assessment in the workplace.
Mining and Geology
Total movement for the quarter of 1,505,865bcm contributed 764,665 tonnes of high grade ore and 386,523 tonnes of low grade ore from Libra West, Libra East, HMB East and HMB West. During the period Libra East and HMB West starter pits were completed as planned. Additional starter pits at Main Vein and Montana were opened up for production focus in the December quarter in line with the plan to open a series of smaller starter pits to minimise near term strip ratios.
The mining fleet, which operated at expected productivity rates throughout the quarter, was augmented toward the end of the quarter with the relocation of the Tails Dam construction fleet to the pit to assist in pioneering work required to open new areas and develop new roads to pits higher up the ridges. A new, local contractor was mobilised to site to focus on the tails dam earth moving program. The change over and start up were achieved with minimal interruption to the work program.
Grade control serviced the operating pits as well as conducting grade confirmation drilling on various old stockpiles. Underground void definition drilling prior to open pit mining commencing in Main Vein was also conducted.
Milling
Mill throughput of 839,503 tonnes produced 29,751 oz of gold and 15,898 oz of silver from an ore blend consisting mostly of softer oxide and transitional ore types.
Metallurgical recovery increased during the quarter from 76% to 82.1%.
Up until 12 September, processing operations were conducted with one ball mill on line whilst installation of the second ball mill was completed. Throughput rates comfortably achieved 4.6Mtpa annualised rate which exceeds the design throughput rate of 4Mtpa. All other sections of the plant were operating at acceptable levels with only minor commissioning adjustments and modifications necessary in some sections.
After 12 September full mill operations using the SAG mill and two ball mills commenced with Ball Mill No.2 experiencing a smooth commissioning. Throughput has steadily increased with the plant achieving the equivalent of 5.1Mtpa annualised rate by the end of the month. At this rate no clear bottlenecks for maintaining above design throughput rates have been found with conveying, grinding, pumping and leaching sections operating within acceptable limits.
The tailings dam wall construction continued in line with schedule and work commenced on the downstream sediment control pond.
Community Relations
The Social Development Program continues to be implemented with participation in and support of community initiatives focusing primarily on education, health and livelihood programs. These programs were undertaken in each of the 8 communities (Barangays) impacted directly around the mine area.
Whilst some programs supported the immediate needs of the communities to resolve their difficulties through the provision of services, building and road repairs other programs focussed on assisting the communities to develop or improve their own livelihood capacity. Importantly these programs include provision of farming implements and animals (water buffalo), goats and fishing equipment and the support for a vegetable farming project which is proving to be very successful and a model for communities to copy.
SEGILOLA GOLD PROJECT UPDATE
----------------------------
The drilling programme was completed early in the quarter. During the quarter 1,188.4 metres were drilled in 9 drill holes by the Turkish drilling contractor, Spektra Jeotek Sanayi Ve Ticaret A.S. ("Spektra), bringing the total metreage for the entire Spektra programme to 11,989.5 metres in 119 drill holes using diamond coring.
By the end of the quarter all of the drill holes have been logged and sampled and all assay results have been received from SGS Laboratory Services GH Ltd,
Significant high grade drilling results announced in the quarter include:
4.5m @ 22.47g/t including 1.4m @ 57.95g/t
5.7m @ 25.15m including 3.85m @ 35.20g/t and 1.85m @
56.61g/t
10.7m @ 6.55g/t including 2.2m @ 20.49g/t
4.0m @ 7.9g/t including 0.9m @ 28.80g/t
3.4m @ 21.73g/t
3.0m @ 42.51g/t
An indicated and inferred resource is being prepared by an independent consultant (NI 43-101) and will be released when completed.
Representative samples were obtained from the drill core held on site and sent to
Analysis of the material also shows below threshold quantities of deleterious elements.
MKUSHI PROJECT UPDATE
---------------------
During the quarter, for the extension of the surrounding prospecting licence, PLLS 290, for a further two year period was received along with the confirmation from the Zambian cadastre office of the approved licence co-ordinates for both PLLS290 and the Large Scale Mining Licence LML67.
The electromagnetic aerial survey ("VTEM") commissioned by our joint venture partners, African Eagle Resources plc ("AFE") has recently been completed. Preliminary analysis suggests good initial indicators for additional targets.
The environmental baseline study for the power line route from the Mita Hills hydro scheme to the Mkushi mine site has commenced. This study is classified as an addendum to the main EIA study, previously submitted and approved. This will enable approval to be obtained for the intended construction of the power line from the Lunsemfwa Hydro Power Company Ltd ("LHPC") generation system some 65km south of the project site. The majority of the power line will be constructed within already approved easements along the Mita Hills dam.
It is intended to draw the required make-up water for mining operations from the Lunsemfwa River which feeds into the Mita Hills Dam, support has been gained from LHPC who have priority call on this supply.
Alternative options for the development of the project are currently ongoing.
CORPORATE
---------
As at
During
During the September quarter, 235,000 share options were exercised for gross proceeds of A$211,500 and 50,000 Warrants were exercised for gross proceeds of C$51,500. 150,000 share options were issued at an exercise price of A$1.79 and an expiry date of
At
ABOUT CGA MINING LIMITED
------------------------
CGA is listed on both the
The 4Mtpa plant was constructed by Leighton Contractors Asia Limited ("Leighton") without one lost time injury. The mining contract for the Masbate Gold Project has been awarded to Leighton, the largest mining contractor in the world. CGA is completing a scoping study for the expansion of the plant throughput at Masbate.
CGA has a disciplined acquisition program focused on acquiring new gold projects with a substantial initial resource with the capacity to grow materially and where the development and operational experience of CGA can be applied to enhance shareholder value.
NATIONAL INSTRUMENT 43-101 AND JORC COMPLIANCE
----------------------------------------------
Mr Geoff.G.Jones, F.Aus.I.M.M.CP Mng, CGA's Consulting Engineer, is acting as the Qualified Person in compliance with NI 43-101 and JORC reporting requirements with respect to this announcement. He has prepared and or supervised the preparation of the scientific or technical information in this announcement and confirms compliance with NI43-101 and JORC requirements.
Further information relating to the Masbate Project is included in the technical report entitled Technical Report on the Mineral Resources of the Masbate Deposit, Masbate Province, Republic of the
A NI 43-101 compliant report has been lodged on www.sedar.com verifying and supporting the new reserve statement made for the Masbate Project. Mr
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
----------------------------------------------------
This announcement includes certain "forward-looking statements" within the meaning of Canadian securities legislation. All statements, other than statements of historical fact, included herein including, without limitation, statements regarding anticipated dates for construction and production, and other milestones related to the Masbate Gold Project and other projects; estimates of capital and operating costs, recovery rates, production estimates and estimated economic return; and CGA's future operating or financial performance, are forward-looking statements. Information concerning mineral reserve and resource estimates including statements regarding the conversion of inferred resources to reserves also may be deemed to be forward-looking statements in that it reflects a prediction of the mineralization that would be encountered if a mineral deposit were developed and mined. Forward-looking statements involve various risks and uncertainties and are based on certain factors and assumptions. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from CGA's expectations include uncertainties related to fluctuations in gold and other commodity prices and currency exchange rates; uncertainties relating to interpretation of drill results and the geology, continuity and grade of mineral deposits; uncertainty of estimates of capital and operating costs, recovery rates, production estimates and estimated economic return; the need for cooperation of government agencies in the development of the Masbate Gold Project; the need to obtain additional financing to develop the Masbate Gold Project; the possibility of delay in development programs or in construction projects and uncertainty of meeting anticipated program milestones for the Masbate Gold Project; and other risks and uncertainties disclosed under the heading "Risk Factors" in CGA's Annual Information Form for the year ended
Appendix 5B
Mining exploration entity quarterly report
Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.
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Name of entity
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CGA Mining Limited
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ABN Quarter ended ("current quarter")
--------------------------------- ---------------------------------
88 009 153 128 30 September 2009
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Consolidated statement of cash flows
--------------------------
Current Year to date
Cash flows related to operating activities quarter (3 months)
$US'000 $US'000
--------------------------
1.1 Receipts from product sales 28,694 28,694
1.2 Payments for
(a) exploration and evaluation (1,052) (1,052)
(b) development (including working
capital expenditure) (17,299) (17,299)
(c) production
(d) administration (1,254) (1,254)
1.3 Dividends received - -
1.4 Interest and other items of a similar
nature received 2 2
1.5 Interest and other costs of finance paid (1,437) (1,437)
1.6 Income taxes paid - -
1.7 Other (annual insurance and other taxes) (7,535) (7,535)
--------------------------
Net Operating Cash Flows (1,657) (1,657)
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Cash flows related to investing activities
1.8 Payment for purchases of:
(a) prospects
(b) equity investments
(c) other fixed assets (87) (87)
1.9 Proceeds from sale of:
(a) prospects
(b) equity investments
(c) other fixed assets - -
1.10 Loans to other entities (4,438) (4,438)
1.11 Loans repaid by other entities - -
1.12 Other - -
--------------------------
Net investing cash flows (4,525) (4,525)
--------------------------
1.13 Total operating and investing cash flows
(carried forward)
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1.13 Total operating and investing cash flows
(brought forward) (6,182) (6,182)
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Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, etc. 76 76
1.15 Proceeds from sale of forfeited shares - -
1.16 Proceeds from borrowings - -
1.17 Repayment of borrowings (3,306) (3,306)
1.18 Dividends paid - -
1.19 Other (capital raising costs) - -
--------------------------
Net financing cash flows (3,230) (3,230)
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Net increase (decrease) in cash held (9,412) (9,412)
1.20 Cash at beginning of quarter/year to date 22,587 22,587
1.21 Exchange rate adjustments to item 1.20 (263) (263)
--------------------------
1.22 Cash at end of quarter* 12,912 12,912
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* an additional US$1,566,609 in cash is held by Filminera
Resources Corporation
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
$US'000
----------------
1.23 Aggregate amount of payments to the parties
included in item 1.2 256
----------------
1.24 Aggregate amount of loans to the parties included
in item 1.10 -
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1.25 Explanation necessary for an understanding of the transactions
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Payment of directors' fees, salaries, taxes, and superannuation.
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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
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n/a
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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
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n/a
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Financing facilities available
Add notes as necessary for an understanding of the position.
--------------------------
Amount
available Amount used
$US'000 $US'000
--------------------------
3.1 Loan facilities - 73,756
--------------------------
3.2 Credit standby arrangements - -
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Estimated cash outflows for next quarter
-------------
$US'000
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4.1 Exploration and evaluation 1,000
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4.2 Development - capex, excluding operational
expenditure. 1,000
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Total 2,000
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Reconciliation of cash
--------------------------
Reconciliation of cash at the end of the
quarter (as shown in the consolidated Current Previous
statement of cash flows) to the related items quarter quarter
in the accounts is as follows. $US'000 $US'000
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5.1 Cash on hand and at bank 12,541 22,489
--------------------------
5.2 Deposits at call - -
--------------------------
5.3 Bank overdraft - -
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5.4 Other (AUD account) 371 98
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Total: cash at end of quarter (item
1.22)* 12,912 22,587
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* an additional US$1,566,609 in cash is held by Filminera
Resources Corporation
Changes in interests in mining tenements
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Nature of Interest at Interest at
Tenement interest beginning end of
reference (note (2)) of quarter quarter
------------------------------------------------
6.1 Interests in mining
tenements
relinquished,
reduced or lapsed n/a n/a n/a n/a
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6.2 Interests in mining
tenements acquired
or increased n/a n/a n/a n/a
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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.
----------------------------------------------------
Amount paid
Issue price up per
per security security
Total Number (see note 3) (see note 3)
number quoted (cents) (cents)
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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
securities 269,491,976 269,491,976
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7.4 Changes during
quarter
(a) Increases
through issues 235,000 50,000 235,000 50,000
A$0.90 C$1.03 A$0.90 C$1.03
(b) Decreases
through returns
of capital,
buy-backs
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7.5 +Convertible
debt securities
(description)
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7.6 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through securities
matured, converted
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7.7 Options and Exercise Expiry
Warrants price date
(description
and conversion
factor)
----------------------------------------------------
7.8 Issued during 25 August
quarter-options 150,000 150,000 A$1.79 2009
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7.9 Exercised during
quarter 30 September
Options 235,000 235,000 A$0.90 2012
22 November
Warrants 50,000 50,000 C$1.03 2010
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7.10 Expired during
quarter - -
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7.11 Debentures
(totals only) - -
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7.12 Unsecured notes
(totals only) 25,000
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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: (signed) Date: ...28 October 2009................
(Company secretary)
Print name: .Hannah Hudson................
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.
For further information: Australian Contact: President & CEO, Michael Carrick, Tel: +61 8 9263 4000, Fax: +61 8 9263 4020, Email: [email protected]; US Contact: Independent Chairman, Mark Savage, Tel: (505) 344-2822, Fax: (505) 344-2922, Email: [email protected]
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