RNS Number:5627K
Ballarat Goldfields N.L.
17 October 2006
BALLARAT GOLDFIELDS NL
ASX and Media release: 17 October 2006
Quarterly Activities and Cash flow Report
For the 3 months ended 30 September 2006
SUMMARY
New Development Plan Released
* BGF released details of a revised development plan. The new plan:
o Focuses on the deeper high grade Resources associated with the Blue
Whale fault;
o Accesses over 12 stopes prior to production to significantly reduce the
grade and tonnage risk during ramp-up;
o Allows earlier access to higher grade stopes;
o Achieves a higher production rate of over 250,000 oz per annum from
600,000 tonnes of ore at a cash operating cost of under AUD$300 per
ounce by 2010.
New Development Plan Implementation
* Implementation of the revised development plan commenced in September
* Record underground decline development of 976 metres for the quarter was
over 40% above the previous quarter and is considered sustainable due to
continuous improvement in work practices and better ground conditions.
* Detailed engineering for the new southern shaft commenced.
Mine Geology and Exploration
* High grade gold intersections from drilling at Ballarat East include:
2m @ 193.6g/t
2m @ 10.2g/t
2m @ 8.0g/t
Corporate
* Cash balance at 30 September 2006 was AUD$13.6 million.
BALLARAT EAST PROJECT Development
New Development Plan
As previously released in early September 2006, BGF completed a comprehensive
review of its development strategy for the Ballarat East project. The outcome
was a new and substantially superior development plan, with early access to the
deeper, higher grade Resources.
High grade assay results continue to be discovered at deeper levels at Ballarat
East. The most recent assay result of 2m @ 193.6g/t on the Mako fault adds to
the already impressive collection of high grade gold assay results on this
fault. The thickest and highest gold content discovered to date occur close to
the intersection of the Mako and Blue Whale faults, with the Blue Whale fault
interpreted to be a major control on the location of gold mineralisation at
Ballarat. The high grade results identified on the Mako fault near the Blue
Whale fault include the following; 9.8m @ 43.8g/t, 12.2m @ 23.5g/t, 5.0m @ 24.8g
/t, 3.0m @ 24.92g/t, 2.0m @ 37.15g/t, 2.0m @ 31.2g/t and 2.1m @ 13.2g/t
These results have formed part of a recently updated Indicated Resource which is
estimated at 0.3Mt @ 20.6g/t for 0.2Mozs of gold. Factoring in this Resource to
the current development plan has had the net effect of increasing the head grade
from a previously estimated 8.5g/t to the current plan of 14g/t by 2010.
Given the significance of these higher grade assay results and the uncertainty
associated with mining close to old workings, a new development plan has been
established to develop a large number of resources in preparation for mining at
a production rate above 250,000ozs per annum. This plan removes significant
project risk, which includes grade and tonnage variability, and resulting cash
flow, by opening up a large number of stopes, including some deeper higher grade
stopes, before commencing the production ramp-up at Ballarat East.
The new development plan incorporates:
*Relocating a proposed ventilation shaft to the southern end of the mine
and equipping it for haulage to provide faster access to higher grade zones,
whilst boosting haulage capacity and flexibility.
*The substantially higher grade of the deeper Resources allows BGF to
develop a production plan which delivers a production rate of 250,000 ounces
per annum, at a lower mining rate of 600,000 tonnes per annum with expected
cash operating costs to be under AUD$300/oz.
*The new plan brings forward major shaft and decline development and
by-passes upper level potential ore sources deferring 2007 production into
2008. This will allow BGF to deliver higher production rates with increased
development flexibility in 2008.
Enhanced understanding of the significance of the Blue Whale fault has
substantially improved the confidence in delineating further high grade
Resources. In particular, potential to the north is yet to be explored or
incorporated into the production plan.
To view figure 1 please refer to www.ballarat-goldfields.com.au
Figure 1:Long section of the new mine design with the ventilation shaft moved
south and second major decline now 200m below the Sulieman decline.
Underground Development
Sept Qtr 05 Dec Qtr 05 Mar Qtr 06 Jun Qtr 06 Sept Qtr 06
U/G Decline
Development
(m) 478 546 584 691 976
Ore Tonnes 2,357 6,737 6,519 3,993 4,100
Decline development rates improved dramatically over the quarter with a total of
975.5m mined. This is an improvement of over 40% on the previous quarter and is
considered to be sustainable due to the growing experience with the ground
conditions, changes to work practices and alternate reagents that have increased
cycle times.
This achievement is a culmination of a number of processes and is related to the
adjustment of work practices as experience has been gained in understanding the
mining conditions in order to reduce cycle times. This could have significant
implications for future development and mining under the new development plan.
The development focus remains on the Sulieman decline for drilling access and
the Woah Hawp decline which is being developed as the long term haulage route.
The second priority has been the Woah Hawp decline which is being developed as
the major haulage decline and for access to stoping areas. At the end of the
quarter the Woah Hawp decline was 301m below the surface.
Revised Underground Development Plan
Trial Mining
Mining is currently underway within the 218 Woah Hawp ore block. This block is
located in the upper level of the mine in a window within the historical
workings.
An ore drive is being mined along the base of the ore body following high grade
vein sets under geological control.
Processing Plant
The main processing focus for the quarter was the test treatment of Ballarat
South surface ore through a pilot scrubbing and screening plant. The aim of the
exercise was to remove clay from the gold bearing quartz and generate a product
suitable for treatment through the existing circuit.
Outcomes from the trial are currently being evaluated.
Approximately 4,100 tonnes of underground ore was processed over the September
quarter with 107 tonnes of sulphide concentrate produced. This concentrate has
been added to the previous stockpiled material in readiness for the stage 2
leach circuit.
Tertiary crushing trials have commenced using a pilot size High Pressure
Grinding Rolls (HPGR) machine. The aim of the trial is to establish whether an
HPGR can increase the circuit throughput capacity in order to meet future
expanded production rates.
MINE GEOLOGY AND EXPLORATION
Exploration drilling
BGF commissioned its third diamond drill rig late in the September quarter, with
the last of the contract drill rigs finishing up in early July. The BGF drill
rigs were largely employed on geotechnical drilling and mine services drilling
with a reduced level of activity on exploration drilling during the quarter. The
transition to owner operator is now complete with greater efficiency and cost
savings expected to be realised from now on. The drilling focus will return to
exploration definition drilling in the next quarter.
Significant assay results from the September quarter are summarised in Table 1.
Hole number Down hole depth (m) Width (m)* Grade g/t Location
BEP 107 80 to 82 2.0m 8.0 Hammerhead Fault
---------- ---------------- --------- -------- -------------
BEP 098 89 to 90 1.0m 8.6 Hammerhead Fault
---------- ---------------- --------- -------- -------------
BEU141A 329 to 333 4.0m 6.0 Tiger Fault
---------- ---------------- --------- -------- -------------
BEU 141 331 to 333 2.0m 10.2 Tiger Fault
---------- ---------------- --------- -------- -------------
BEU 141 368 to 370 2.0m 193.6 Mako Fault
---------- ---------------- --------- -------- -------------
Table 1: Significant assay results received in the September quarter 2006.
*All of the intersections reported have been adjusted for their estimated true
widths.
Berringa
A total of 2,763m have been drilled at Berringa this year in what was,
essentially, the first diamond drilling program ever conducted within the
historical Berringa goldfield. The drilling program was designed to confirm the
location of the major faults, anticlines and lithology, which control the
location of gold mineralisation at Berringa. Historical mining at Berringa had
produced approximately 0.3Mozs of gold, and BGF announced in 2004 an exploration
potential of 0.9Mozs for the Berringa project.
The 2006 drilling program has identified 3 major faults, including an extension
of the Williams Fancy fault, which was mined historically. It also confirmed the
location of the major anticline. Historical gold deposits at Berringa have been
identified to exist close to the intersection of the large faults and the major
anticline. The presence of these features confirms that the potential at
Berringa remains positive, with a second drilling program currently being
designed to target the intersection of the faults and the major anticline.
The best assay result from the drilling program was 1m @ 5g/t, at 93 metres
below surface on the Williams Fancy fault.
CORPORATE AND FINANCE
Finance
The cash balance at 30 September 2006 was $13.6 million.
BGF signed a non binding term sheet for the provision of a A$100 million delayed
draw financing facility as part of the funding to implement the new development
plan for Ballarat East.
The debt facility is being arranged by RFC Corporate Finance Ltd and is subject
to a number of conditions typical of a facility of this nature including;
provision at the sole discretion of the Lenders; third party due diligence;
final credit approval and legal documentation. The term sheet does not
contemplate BGF entering into any hedging arrangements.
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 prefeasibility 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 Alister Maitland Managing Director
Mt Clear Victoria 3350 Richard Laufmann Non-executive
Director
Australia Mike Etheridge Director of
Operations
Wojciech Ozga
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, 19-31 Pitt St
Investor Enquires Tel: 1300 850 505 Sydney, NSW, Australia 2000
Tel: 03 9415 5000 AIM Nominated Broker
Fax: 03 9473 2500 Numis Securities
www.computershare.com 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 September 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 (9,998) (9,998)
evaluation
(b) development - -
(c) production - -
(d) administration (1,136) (1,136)
1.3 Dividends received - -
1.4 Interest and other items of a similar 294 294
nature received
1.5 Interest and other costs of finance paid (200) (200)
1.6 Income taxes paid - -
1.7 Other (provide details if material) - -
------------ ------------
Net Operating Cash Flows (11,040) (11,040)
------ -------------------------- ------------ ------------
Cash flows related to investing
activities
1.8 Payment for purchases of: (a)prospects
(b)equity investments
(c) other fixed assets (1,990) (1,990)
1.9 Proceeds from sale of: (a)prospects
(b)equity investments
(c)other fixed assets 15 15
1.10 Loans to other entities
1.11 Loans repaid by other entities
1.12 Other (provide details if material)
------------ ------------
Net investing cash flows (1,975) (1,975)
------------ ------------
1.13 Total operating and investing cash flows (13,015) (13,015)
------ (carried forward) ------------ ------------
--------------------------
1.13 Total operating and investing cash flows (13,015) (13,015)
------ (brought forward) ------------ ------------
----------------------
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, 691 691
etc.
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)
------------ ------------
Net financing cash flows 691 691
------ ---------------------- ------------ ------------
Net increase (decrease) in cash held (12,325) (12,325)
1.20 Cash at beginning of quarter/year to date 25,967 25,967
1.21 Exchange rate adjustments to item 1.20
------------ ------------
1.22 Cash at end of quarter 13,642 13,642
------ ---------------------- ------------ ------------
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 242
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 13,642 25,967
------------ -------------
5.2 Deposits at call
------------ -------------
5.3 Bank overdraft
------------ -------------
5.4 Other (provide details)
----- ---------------------- ------------ -------------
Total: cash at end of quarter (item 1.22) 13,642 25,967
----- ---------------------- ------------ -------------
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 1,188,153,935 1,188,153,935
securities ---------- ---------- ----------- -----------
7.4 Changes 5,000,000 5,000,000 3.45 cents 3.45 cents
during
quarter
(a) Increases 2,500,000 2,500,000 4.72 cents 4.72 cents
through
issues
(b) Decreases 3,000,000 3,000,000 One third One third
------ through ---------- ---------- each at: 12 each at: 12
returns of cents; 13 cents; 13
capital, cents; 15 cents; 15
buy-backs cents cents
---------- ----------- -----------
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)
8,000,000 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
2,300,000 20.5 cents 30/09/2011
---------- ---------- ----------- -----------
7.8 Issued during 2,300,000 20.5 cents 30/09/2011
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: 17 October 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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