Update - September, 2003
Since my last update letter in June 2003 I am pleased to report that your Company has continued to make good progress on several fronts.
- Successful Capital Raising ensures additional funds of at least $3.2 Million.
- Cibaliung Feasibility Study attracts interest from project financiers.
- Targets for potential gold mineralization are being identified in central Victoria.
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Corporate
The Company is in the process of completing a capital raising that will secure at least $3.2 Million in additional funds for the Company. A placement (subject to shareholder approval at a meeting to be held on 7th October 2003) will raise $1.66 M and shareholders have been offered the opportunity to participate in a Share Purchase Plan, which has been underwritten in the amount of $1.6 Million.
The proceeds of the raisings will be used to fund the completion of the Bankable Feasibility Study ("BFS") through to obtaining project financing for the Cibaliung Project. Some minor amount will be used to further the Company's exploration interests in central Victoria.
Cibaliung Gold Project - Banten Province, western Java, Indonesia
The Company's interest in the Cibaliung Gold Project stood at 75% at the end of the June 2003 Quarter. The Company's is proceeding with a BFS in respect of this project based on treating 220,000 tonnes of ore over a 6 year mine life, producing 70,000 ozs gold equivalent per annum at an average life of mine cash operating cost of less than US$200/oz.
The BFS is proceeding to plan with diamond drilling having commenced in August 2003. The first holes drilled were designed to collect ore samples for further detailed metallurgical testwork as a precursor to finalising the processing plant's design. Drilling to upgrade the resources classifications will then follow. Work in numerous other disciplines including mine geotechnical, geohydrology, infrastructure and environmental is also being undertaken concurrently.
Several major consulting and contractor firms have been selected or short listed for roles in the BFS and appointments are proceeding. The Company aims to complete the BFS during the first half of 2004.
The Company has held preliminary discussions with several major banking groups that provide project funding for resource projects. It is pleasing to report that the Cibaliung Gold Project is generating interest amongst these potential lenders and none of them have expressed any reservations about funding resource projects in Indonesia. These discussions will be ongoing with a view to the Company selecting one or more groups to work with as the BFS is progressed to completion.
Mount Alexander Goldfields, Raywood and Sebastian Projects - central Victoria
The Company's team of geologists working on this project, based on the goldfields around Bendigo in central Victoria, have identified several exploration targets that warrant drilling.
At the regional level, our geologists are analysing data from the government sponsored VIMP program which has resulted in new data sets (mainly geophysical and geological) and the extensive databases compiled by the Victorian Geological Survey. The aim of this exercise is to identify those first order structures that may have played a part in the localizing of gold mineralization. Whilst the significance of the N-S trending fold axes and faults has long been recognized, modern processing and interpretive methods can identify deep-seated crustal structures as well as NE and NW trending cross-structures. These cross-structures break the NS trends into distinctive structural domains in a way that is analogous to the "jog structures" that have proved to be highly productive in the Western Australian goldfields.
Secondly, they have compiled and reinterpreted over 100 years worth of geological data directly related to the Castlemaine Goldfield and more particularly, the Wattle Gully mine. With this information and the assistance of modern computing technology, they have been able to construct a three dimensional geological model of the Wattle Gully Fault reef system. From this they have distilled those key features that control mineralization and that provide a surface expression of this buried orebody.
The Company is focused on finding one or more gold deposits within 150 to 300 metres below surface. This shallow target zone substantially increases the chances of making discoveries and reduces discovery costs.
Shareholders will by now have received from the Company a Notice of Meeting and Explanatory Statement for a General Meeting to be held in Melbourne on 7 October 2003 to approve the placement and the issue of shares pursuant to the Shareholder Share Purchase Plan referred to above. I encourage you to attend this meeting if you can. The Managing Director - Mr. Ian Price will provide a further update to shareholders at that meeting and you will also have the opportunity to speak with members of the Board of Directors.
Yours sincerely,
Pieter W. Greeff
Chairman
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