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Company NewsPre October 1998 |
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Other Mining News (Pre September 1998)
BHP Coal has warned that annual global coal production will have to be reduced by as much as 20 million tonnes by 2000 to avoid a glut in the world market. The coking coal price had fallen approx. 5% since April to about US$52/tonne.
Delta shareholders approved the separation of the company's platinum assets into the new company Zimplats. Delta will retain 51% of Zimplats.
EA is to sell its 10% interest in the Portland aluminium smelter in Victoria.
Leo Shield focuses its exploration effort in West Africa because of the potential to discover low cost gold deposits, the political stability of the countries in which it operates and the ease of conducting exploration operations in those countries.
The level of group exploration activities has continued to reduce dramatically in response to the depressed gold price and the consequent effect on the exploration sector of the capital markets, which has resulted in a virtual drying up of new funds for explorers. Leo Shield's offices in Mali, Senegal and Guinea have been closed and operations in all countries have been scaled back.
Exploration has been directed to projects providing the maximum potential for early production or where substantial value could be added at minimal cost. A concerted effort has been made to farm out projects to major mining companies, which are continuing to actively explore in West Africa. These major companies are showing a willingness to acquire properties which they consider have the potential to host large gold deposits.
SUMMARY OF ACTIVITIES
In Ghana, exploration has focused on the Grumesa Joint Venture, covering the Ashanti Reconnaissance Licence and Grumesa-Awisam Prospecting Licence, where a 4km long by 500m to 1km wide gold mineralised system has been identified. Encouraging results from RC drilling include 33m @ 3.0g/t including 13m @ 6.3g/t, 16m @ 3.0g/t, 13m @ 3.3g/t, 24m @ 2.2g/t, 46m @ 2.2g/t including 18m @ 4.4g/t, 27m @ 2.0g/t including 6m @ 4.2g/t, 45m @ 1.5g/t including 8m @ 3.5g/t, 67m @ 1.2g/t including 27m @ 1.8g/t and 82m @ 1.0g/t Au. RC drilling to test for shallow oxide gold mineralisation and to identify potential deeper targets on the project is continuing.
After some encouraging RC drilling results from properties in the Manso Nkwanta gold belt, including:
exploration activity on prospects in Ghana other than the Ashanti Reconnaissance Licence has been wound down.
The Wabri concession on the Ashanti Gold Belt in Ghana was packaged with some surrounding ground optioned by Leo Shield and farmed out to Ashanti Goldfields Company Limited ("Ashanti") in September 1998.
In Côte d'Ivoire, Leo Shield and its joint venture partners successfully acquired three tenements in northern Côte d'Ivoire covering a total area of nearly 2,900sq km. The Tengrela East and Tengrela South concessions, which lie south along strike from the Syama Mine in southern Mali and contain numerous old workings and untested targets from previous regional soil sampling programs, were farmed out to Randgold before undertaking any exploration. Randgold can earn a controlling interest in the project by spending US$4,000,000 on exploration over five years. Leo Shield retains a 34.67% equity and can elect to contribute proportionately to future expenditure or dilute to a 20% interest carried through to completion of a bankable feasibility study. A number of major gold producers are negotiating to farm into the Korhogo concession after a wide spaced soil sampling program delineated a 25km long geochemical anomaly associated with a major shear zone in the northern portion of the concession.
In Guinea, application has been made to convert two reconnaissance permits in the Kouroussa region to research permits. Negotiations with Leo Shield's joint venture partners to restructure the equity position over these prospects and the nearby Tamankya research permit are continuing in conjunction with negotiations to farm out the properties to a major gold miner.
In Burkina Faso, a limited MMI orientation soil sampling program was undertaken on the Bougouriba and Serakoro concessions and two new permits in south-west Burkina Faso were granted in June. Negotiations to farm out Leo Shield's exploration interests in Burkina Faso are continuing with a number of major producers.
Encouraging soil sampling results at Dialafara-Khama in eastern Mali did not carry through into drilling results and the 24sq km package of properties was returned to the vendors after RAB drilling in June 1998. RAB drilling results from the Kouroufing prospect, located 50km south-east of Kenieba in Mali, were encouraging, but Leo Shield's ongoing involvement in this project is subject to renegotiation of the existing joint venture agreement.
In Senegal, SAMAX undertook RAB drilling on the Sambarabougou concession with limited success before relinquishing its option to farm into the property and Leo Shield has advised its joint venture partners that it will not fund further exploration on the project.
The Leo Shield group equity position in concessions and a summary of basic contract terms are set out in the schedule of mineral concession interests on pages 12 to 14. Leo Shield's reported equities in concessions allows for government entitlements at the mining stage of a project. For example, Leo Shield's reported equities in concessions in Ghana recognises that the government is entitled to a notional 10% equity at the mining stage, so total ownership of a concession is described as a 90% interest.
MIM has sold its Wandoan coal deposits, with reserves of 1.4 billion tonnes, to US-based Entergy Corp. In May MIM, Entergy and Tarong Energy entered into an alliance to develop the Dawson Valley coal mine and power station in QLD. The proposed 3Mtpy coal mine at Wandoan was intended to supply a 750MW power station, to be built and owned by Entergy.
Earnings in July and August have been adversely affected by lower commodity prices. Mine production was up 15% and zinc metal output was up 10%; however these were offset by a 25% fall in lead production.
BHP has declared a force majeure on relevant crude oil, natural gas and LPG contracts from its Bass Strait operations after an explosion at the Longford gas plant on Friday cut supply to Victoria.
BHP's copper division is on target to trim $215 million off its cost base in the current year amid forecasts of difficult times ahead for the copper price.
EL 4209, over the Yandoit Goldfield, and EL 4235, over the old Eureka Mine, were both granted this year, increasing the area of the Mt Alexander Goldfield Project in Central Victoria to about 350 square kilometres.
An 800 metre diamond drilling program was completed at the old Eureka Mine.
The Mt Alexander Goldfield Project Southern Area geochemical survey has been completed with 10 square kilometres surveyed and several targets identified.
During 97/98 Reef Mining treated 16,658 tonnes of ore through the Wattle Gully CIP plant. The agreement with Reef Mining NL to dry hire the Wattle Gully plant has been extended for a further 6 months to 26 February 1999 with options for two further six month options for ore treatment until February 2000.
Utilising computer modelling the Golden Mountain Project resource estimates have been revised and computerised mining studies have been used to generate ore reserve estimates.
Exploration of the Duketon Belt continues with Duketon continuing to cash contribute its 25% share of exploration expenditure. 1:25,000 scale regional geological mapping has been carried out utilising new areomagnetic data and aerial photography.
Duketon has a strong cash position and shareholdings in various listed securities. The company continues to evaluate corporate opportunities in the mining industry in Australia and the Pacific region.
During the year the company acquired a significant stake in Tanganyika Gold NL and Fred Bart was appointed as a non executive director of Tanganyika Gold NL. Duketon considers the shareholding in Tanganyika Gold as a long term strategic investment and is particularly excited about the recently announced Balla Balla Vanadium Project in the Pilbara region of Western Australia.
Rio Tinto has surrendered its part interest in the Grieves Siding zinc prospect in Tasmania; in return for 100% ownership Allegiance will pay Rio 2% royalty on any minerals produced.
Dragon plans to acquire iron sands deposits (the Aotea-Kawhai and Waipipi deposits) along the coast of New Zealand's North Island. The key is to produce iron carbide, a relatively new product which provides a high-grade substitute for scrap steel.
Dragon also announced that Sipa Exploration would farm into its Ashburton tenements in WA with the right to earn up to 70%.
Gympie Gold says it has discovered a new vein with visible gold at its Gympie Elderado operations in QLD. The coarse visible gold was discovered about 90m above the highest level of the Monkland mine and has been traced for a strike length of 300m.
Drilling at the Connor's Arch project in QLD has resulted in further encouraging intersections, including 24m @ 2.48 g/t Au and 6m @ 6.1 g/t Au. The companies said they believed the area contained a previously unrecognised major mineralised system which was open in all directions.
Resolute will further invest in GGM by extending a $1.75 million loan to pave the way for reopening the Obenemase mine in Ghana (closed 2 years ago). The loan will be used to pay for development drilling, metallurgical testwork and other preparations for the mine's recommissioning, with Resolute having the option of being repaid in GGM shares at the rate of 6 cents each.
Rescheduled maintenance work and longer-than-expected remedial work at the Lihir gold mine has led to Lihir further reducing its 1998 gold production forecast to 530,000 ounces, from the predicted 600,000 ounces. Production in 1999 is forecast to be 700,000 ounces.
SOG has ruled out a bid for Australian Kaolin after revealing it has acquired a 15% stake in AK (38.19 million shares @ 13 cents each).
Anaconda has posted lower earnings in 1997/98 of $2.15 million; pre-tax, pre-abnormals profit is up to $4.19 million against a $3.51 million loss previously.
AXA-UAP & National Mutual Holdings ceased to be a substantial shareholder.
The global economic crisis and a plunge in stock markets could leave gold as one of the few viable investment sectors in the near future, the 1998 Gold Coast Gold Conference was told yesterday. Sydney-based Credit Suisse First Boston resources director Jonathan Hyde says over the next 6 months he expects gold around US$270-US$310 an ounce. But failing global markets and political turmoil could send the demand for gold soaring.
"When we factor in the lack of alternative investments and the potential for a systematic collapse of the financial system on a scale not seen since 1929 gold, not paper assets, is what you want to own," he says.
The last time investment markets were threatened, in 1987, there were many other investment avenues - government bonds were offering 17%, hedge funds were emerging, Asian economies expanding and real estate markets were not solid.
"Compare this to today: as the world has started to get nervous we have already seen a flight to US dollars that's crushed the yield on 30-year US bonds to 5.15%," says Mr Hyde.
"Meanwhile, the feeling of wealth that the equities rally has created has carried our real estate markets with it to all-time highs; and the very alternative investments that we turned to last time, Asia and the hedge funds, are now the cause of our concern.
This time, if we see a correction in equities.....there is nowhere for the money exiting the market to go. European currencies face the uncertainties of EMU and collapsing governments and infrastructure to the east, sterling is already very high and most commodities are at an all-time low.
Gold looks far from dead," he says.
Burdekin needs about $15 million to restart operations at the troubled Mt Kasi goldmines in Fiji. Burdekin has taken over ownership from Pacific Island Gold. Burdekin is in the process of refinancing the operation.
Goldfields has completed the sale of its Wau assets in PNG to Australian Gold Fields NL which is under adminisration.
Zuma Holdings Inc became a substantial shareholder with a relevant interest of 5.26%.
Metal detection manufacturer Minelab will move part of its operations offshore to Ireland to avoid Australia's "uncompetitive and unsustainable" tax.
Problems at the Port Pirie smelter will result in a loss of about 1400 tonnes of zinc; however the more important production of precious metals and lead will not be affected.
Lion Ore Mining International is to develop a small-scale mining project at the Emily Ann nickel deposit after restructuring its interests there with partner QNI. QNI, a partner in the Round Top JV in WA, announced a deal enabling the transfer of its 37.5% stake in the deposit to Lion Ore. In return Lion Ore will transfer part of its interests in the neighbouring Maggie Hays deposit to QNI, boosting its interest to 69%.
SMC Resources launches its comprehensive web site, constructed and hosted by Digital Reflections, to coincide with the Gold Coast Gold Conference (24 & 25 September). Click on the url to access the site - http://www.smcresources.com.au
Transfield Energy has announced plans to invest $750 million in a Qld energy project, which includes a 700km pipeline linking coal seam methane fields near Roma to a power plant at Yabulu in north Qld.
The Australian Bureau of Agricultural and Resource Economics has predicted Australia's minerals and energy exports could rise by only 1.5% in 1998/99 to less than $42 billion, mainly due to weak world demand.
Alcoa has reportedly offered to pay US$1.2 billion for China's second biggest aluminium producer (Qinghai Aluminium Industry) to expand on the country's mainland.
Hake Capital Management Inc ceased to be a substantial shareholder.
BHP has warned that the company was preparing for further deterioration across key commodity markets in Asia. BHP has had write downs totalling $4 billion in the past 2 years and had a $1.47 billion loss last financial year.
Hartley Poynton is to merge with PJW, effective 2 November.
Metalcorp has attributed a 25% sliump in its share price this month partly to deteriorating world scrap ferrous metal prices and a change in investor sentiment towards small capitalised companies.
Otter has announced encouraging drilling results from its Beaver Creek, Banjo and Banjo North Projects, 35km west of the Tanami operation in the NT. Results included 56m @ 13.6 g/t Au and 21m @ 13.6 g/t Au from Beaver Creek, 18m @ 12.2 g/t Au and 22m @ 4.9 g/t Au from the Banjo and Banjo North Projects. At the new Marlena discovery, results included 4m @ 11 g/t Au.
Pacmin has announced encouraging drilling results from its Tarmoola project in WA. The mineralisation extends as a wide band around the eastern flank of the existing mine and opens the possibility of a major cutback to access the new ore. Results included 90m @ 6.7 g/t Au, 29m @ 24.4 g/t Au, 16m @ 12.2 g/t Au and 10m @ 35 g/t Au.
Taipan has increased reserves at its Paulsens prospect in WA; Taipan is expected to complete a pre-feasibility study next month into a 150,000 ounce/year gold operation.
Capital Property Finance Pty Ltd decreased its relevant interest from 7.95% to 7.43%.
BHP and its JV partner have committed US$88 million to develop a new oil field in the Timor Sea - the Buffalo oil field with an estimated 22 million barrels of proven and probable reserves.
Yardia Pty Ltd became a substantial shareholder with a relevant interest of 7.78%.
Permanent Trustee increased its relevant interest from 12.29% to 13.35%
Aurora has acquired a 50% interest in the Morobe gold project in PNG. The previous owner, Australian Gold Fields NL, went into administration last March. Aurora will pay $24 million for Morobe Consolidated Goldfields. The project contains an inferred resource of about 5 million ounces of gold and 60 million ounces of silver.
City View says its subsidiary Western Wisesa Petroleum has passed the prequalification requirements set by the Indonesian oil company Petramina for the 2500sq km Timoforo block.
The 1998 drilling campaign has commenced at the West Esh El Mallaha field in Egypt. Indicative recoverable oil reserves are between 37 million barrels and 93 million barrels.
Yinnex has the option to take 40% of the O'Sullivans lignite project (near Norseman in WA) owner, Australian Power & Energy, at a cost of $2.5 million. Yinnex plans to use an unspecified US coal technology to pump gas through the lignite to produce oil, which will be used to generate electricity.
Amity has offered Great Southern shareholders 1 ordinary fully-paid 20 cent share for every 4 of GS's ordinary fully-paid 20 cent shares and will make concurrent offers for all of GS's 2 cent partly-paid shares. Amity argues the offer represents a 56% premium on GS's closing price of 6 cents on 15 September.
BHP has recorded a $351 million net profit for the first quarter of this financial year, 1.7% below the corresponding period last year. Lower commodity prices were partially offset by asset sales and the lower A$.
Normandy has forecast an average realised gold price of A$612/ounce in calendar 1999 and says its major challenge in 1999 will be to advance the Wandoo resource in WA and turn the 5.6 million ounce resources to reserves at Yamfo-Sefwi in Ghana and Perama Hill in Greece.
Preston has encouraged shareholders to support its $319 million purchase of Resolute's Bulong nickel mine after setting a date for an extraordinary meeting to vote on the deal. This comes amid a question arising over whether all major shareholders are ready to support the deal at this stage.
The Solomon Islands High Court yesterday ordered that a legal challenge by Mr Gordon Billy Gatu to the granting by the Solomon Islands Electricity Authority (SIEA) of an electricity generation licence to Gold Ridge Mining Limited be dismissed.
WM says it will sell non-core assets obtained through its recent acquisition of Aberfoyle. These include the Khartoum gold project which contains 1.2 million ounces, the 22%-owned Merlin diamond project in the NT and the Wemen mineral sands project in NSW.
AGL has joined the short-list of about 6 companies to submit its final bid for WMC's two-third stake in the Goldfields pipeline and power generation assets. Bids are due by 25 September.
Permanent Trustee decreased its relevant interest from 18.45% to 17.30%.
Explorer Management Pty Ltd ceased to be a substantial shareholder.
Explorer Management Pty Ltd and Jaizan Pty Ltd ceased to be a substantial shareholder.
Explorer Management Pty Ltd and Jaizan Pty Ltd ceased to be a substantial shareholder.
Hargraves has appointed William Howe as its managing-director. Mr Howe was previously md of Ghana Gold Mines and was a founding director of Hargraves major shareholder Straits Resources.
Explorer Management Pty Ltd and Jaizan Pty Ltd ceased to be a substantial shareholder.
Explorer Management Pty Ltd and Jaizan Pty Ltd ceased to be a substantial shareholder.
Omega has acquired 2 new gas sales for its Otway Basin reserves - expected to net Omega $23 million over the next 12 years. The project JV's have entered into a conditional agreement for the sale of up to 41 petajoules of gas.
Explorer Management Pty Ltd and Jaizan Pty Ltd ceased to be a substantial shareholder.
Savage says it is on target to secure funding for its $680 million US Clarkesville zinc refinery.
WR has posted a $2.26 million full-year net profit, mainly due to a strong performance from its jointly-owned Dalgaranga mine in WA.
Lynas has launched a 2-for-7 scrip bid for Sipa Resources - its partner in the emerging Paraburdoo project. Lynas will offer 2 fully-paid ordinary shares and 1 option to acquire a Lynas share at an exercise price of 20 cents for every 7 Sipa shares.
A contract was signed with Regional Drilling of Lae, Papua New Guinea, for a minimum 1,000m of diamond core drilling at the Feni Island Property. In addition, induced polarisation (IP) and controlled source audio magneto telluric (CSAMT) ‘electrical’ geophysical surveys commenced at the Kabang Prospect, during the last week of August.
Normandy and Homestake have announced changes to the Super Pit and Mount Charlotte gold operations in Kalgoorlie. Poor ground conditions and high-cost mining (A$394/ounce) at the Mt Charlotte underground mine have forced the partners to cut back on production resulting in a 17% fall in gold production; the workforce will be halved. To offset this loss, output at the Super Pit (cash cost A$312/ounce) will increase from 68Mtpy to 75Mtpy.
BHP has located another 7 diamond-bearing kimberlite pipes in Canada's Northern Territories, bringing the total to 107. BHP will officially open its $1.1 billion Ekati diamond mine in Canada's Northern Territories on 14 October.
Golden Cross Resources NL recorded further positive drill results from its 100% owned Kempfield silver property near Blayney, NSW. The property is subject to a 5% net profits interest.
Twelve reverse circulation percussion holes for 889m have been drilled at Kempfield in a programme aimed at expanding the silver resources indicated in several zones by previous drilling.
Assay results have now been received for all twelve holes, drilled at a declination of 55 degrees and at an azimuth of 110 degrees.
Resource calculations to a depth of 120m utilising the results of the twelve GCR holes together with results from 180 holes drilled by previous explorers give the following results:
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This equates to 15.7 million ounces of silver plus 927,000 tonnes of barite.
Initial simulated heap leach metallurgical studies on potential oxide silver ore are encouraging and indicate 70.0% silver recovery after 45 days of leaching. Flotation tests on residues from oxide silver agitation leach test samples recovered 92% of the barite at a grade of 91.2%.
The new high grade base metal and silver intercepts provide additional evidence that Kempfield represents a significant v olcanogenic massive sulphide (VMS) environment. Follow-up drilling over the next quarter will be aimed at developing this ore target concept and extending the resource.
Petroz advises that the Setteporte-1 exploration well in Italy was at a depth of 2,333mKB (at 11 September) and drilling ahead. proposed depth is 3,100m.
Savage has announced it has discovered a large zone of high-grade gold mineralisation at its Red Legs prospect, 200km north of Southern Cross in WA, and the known zinc mineralisation at the Accha zinc project in Peru was substantially increased - however it is complex metallurgically.
Takeover rumours also resulted in an increase in the share price.
The Directors of Straits Resources Limited (ASX Code: SRL) today announced a half year operating loss before tax of A$959,000 and an operating loss after tax of A$1.4 million.
Straits Chief Executive, Mr Brian Rear said that sales revenue for the period increased by a respectable 42% to A$23.2 million (A$16.4 million in the June 1997 half), of which A$10 million was contributed by the new Sebuku coal operation in Indonesia.
"By maintaining strict controls on operating costs, Sebuku has contributed a loss of only A$600,000, a satisfactory result during its start up period. The directors expect that in the second half of the year Sebuku will contribute positively to earnings," he said.
The Sebuku Coal Mine produced 390,000 tonnes of coal to 30 June, following its commissioning in March 1998 and is on target to meet its production forecasts of 1.0 million tonnes for calendar 1998.
At the company’s 60% owned Girilambone Copper Mine in New South Wales, revenue and profit was affected by a lower average copper price of US$0.85/lb (1997:U$1.14/lb) received during the period.
For the six months to 30 June, the Girilambone Copper Mine produced 8,790 tonnes of copper cathode, which is in line with the annualised production forecast of 17,500 tonnes.
Total cash costs at Girilambone remained low, averaging US$0.41/lb for the six months, enabling the company to realise a healthy cash operating surplus, even at current low copper prices.
Nifty Copper performing to expectation
In the second half year, the highlight so far has been the agreement to acquire the Nifty Copper Operation from WMC Resources Ltd for A$50 million with A$18 million of this amount payable in four equal annual instalments commencing on 1 July 1999.
According to Mr Rear, the Nifty Mine will contribute positively to earnings and cash flows. Subject to settlement, the company is entitled to the copper production and net operating cash flows from Nifty from 1 July 1998.
Solid cash flows
Commenting on the Company’s cash flows, Mr Rear said that, "although lower than the previous corresponding period, the $3.3 million in cash flows generated was satisfactory in light of prevailing commodity prices."
"Given the uncertainty regarding the impact of the Asian economic downturn, which continues to have an effect on the price of base metals and other commodities, it is important that we maintain our focus on lowering operating costs to carry us through the present low commodity price cycle," he said.
Cash flows were also reduced by the payment of A$2.9 million in income tax and also adversely impacted by foreign currency hedge contracts which at 30 June 1998 totalled US$53.25 million at an average exchange rate of A$1.00 = US$0.7123.
New project developments in Indonesia and Namibia
In other developments, the Company entered into two new joint ventures including a farm-in agreement to earn an 80% interest in certain exploration tenements and mining claims in Namibia. The area has potential to host significant copper and resources amenable to treatment using heap-leach SX-EW.
In Indonesia, PT Bahari Cakrawala Sebuku, an 80% owned subsidiary of Straits Resources Limited, entered into an agreement to acquire an 80% interest in the Busui Coal Project in Kalimantan.
Cautious outlook
Looking ahead, Mr Rear said the directors were pleased with the operating performance of both Girilambone and Sebuku and the newly acquired Nifty mine is also operating in line with expectations.
Whilst the directors anticipate that the Company will return to profitability in the second half, they cautioned shareholders about the Company’s earnings performance in the short and medium term, which may be influenced by worldwide factors beyond the Company’s control.
Nevertheless the Directors believe that the Company’s focus on developing low cost operations which generate positive cashflow during the lows in commodity cycles will serve the company well in the long term.
WMC Announces Plans to Suspend Mining at Three Kambalda Mines
WMC Limited today announced it will reduce production of nickel in concentrate by 10,000 tonnes per annum at its Kambalda Nickel Operations in Western Australia.
Mining will be suspended over the next few months at three of its seven mining complexes - Wannaway, Blair and Otter/Juan. The three mines, which are currently operated by mining contractors Byrnecut and Henry Walker, are Kambalda's highest cost operations.
The mine suspension forms part of WMC's long term strategy for the Nickel Division to operate Kambalda as an efficient and flexible producer. These changes will also ensure WMC remains one of the world's lowest cost nickel producers.
The suspension of mining at the three mines and a corresponding organisational restructure at the Kambalda Nickel Operations is expected to affect approximately 150 WMC and contractor employees.
An Feng has posted a $111.7 million first-half loss and is negotiating various debt restructure plans. This restructuring has forced a delay to the progress of the proposed steel slab mill in WA.
AR is to allot shares from its $11.2 million 1-for-4 rights issue on 23 September; Great Central Mines has taken up its full allotment.
Dome has reported a 416% leap in full-year net profit to $4.59 million (including a $3.1 million tax charge) following record gold output of 77,833 ounces of gold equivalent from its Tolukuma gold project in PNG. The average cash cost was $228/ounce. No dividend was declared.
Directors have rejected a 5-for-9 scrip offer from West Oil, labelling it "inadequate". Ernst & Young assessed the value of the bid as between 7.3 cents and 15.9 cents per share and Frontier shares at between 13.4 and 20.8 cents.
Preliminary Final Report to 30 June 1998
Herald is pleased to announce that it has achieved an operating profit of $6.0m for the 97/98 year.
This was achieved on production for the year of 111,563oz of gold at an average cost per ounce of $415. In a year of financial consolidation for the company, bank debt was reduced from $12m to $1m, and cash reserves built up to $10.5m at balance date.
Other achievements of note for the year were:
Principal Activities
The principal activities of the economic entity during the financial year were oil and gas exploration.
There were no significant changes in the nature of the economic entity's principal activities during the financial year.
Operating Results
The consolidated loss and extraordinary items of the economic entity after providing for income tax and eliminating outside equity interests amounted to $ 758,991.
Dividends Paid or Recommended
The directors recommend that no dividend be paid by the Company. No dividends have been declared or paid by the company since the end of the previous financial year.
Review of Operations
The company continued its drilling operations in prospective areas in Sout East Queensland.
Significant Changes in State of Affairs
There were no significant changes in the State of Affairs of the group for the period ended 30 June 1998.
After Balance Date Events
No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the economic entity, the results of those operations, or the state of affairs of the economic entity in subsequent financial years.
Likely Developments
The economic entity will continue to pursue the exploration and development of its oil and gas exploration permits in Australia
Tiger International Resources Inc. announces the results of the recent undercover drill program at Springfield, South Australia. The program was very successful as 17 of the 66 holes returned positive kimberlitic indicator minerals. Results can be divided into four geographic areas from south to north. The geological conclusion from work to date is that Tiger has located evidence for at least two undiscovered kimberlitic sources for the minerals in holes SF8 and SF50. Other results from holes SF49 and SF69 suggest that further kimberlites are also present in the project area.
Bemax has advised that work at the Murray Basin mineral sands JV had encountered intersections of heavy minerals at 2 of the prospects - Coombah and Nareen. At Coombah, drilling identified 2 strands with mineralised intersections located 200m apart with grades up to 26% heavy minerals. The Coombah 1 strand is 2700m long and remains open, with a 1km extension to the west.
Dragon is to explore for gold in Eretria where it will operate the Zara gold project - an area where at least 3 parallel quartz veins which average 3-4m in width at the surface in a 60m wide zone have been delineated. Rock chip samples have assayed up to 53.6 g/t Au.
General Gold has reporetd a $23.4 million loss mainly due to a $18.23 million write-down of its Mauritian mining ventures as part of a $28.04 million abnormals provision.
Lynas has reached agreement to allow De Beers subsidiary Stockdale Prospecting to explore for diamonds only in the northern portion of the Klondyke project area. Stockdale can earn up to 51% by spending $2 million within 3 years.
Spinifex Gold's African subsidiary is about to start a drilling program at its Buck Reef and Kitongo prospects in Tanzania Drilling is designed to at least double the existing resource base of 438,000 ounces. The Lion Selection Group recently announced it would invest $6 million in a Spinifex share placement to finance the exploration.
Petroz has acquired Apache Corp's 39% interests in the Bentu and Korinci-Baru PSCs in Sumatra, Indonesia. The PSCs contain a number of gas fields, as well as the potential for future discoveries. Total cost of the purchase will be US$12.3 million and Petroz expects that a contract for the sale of approx 150BCF of bentu gas will be finalised by late 1998. Following the construction of bentu production facilities and a 40km pipeline, Petroz anticipates that first gas sales of about 40 million cubic feet/day will commence by early 2000.
Petroz has posted a 56% fall in net profit for the year to $2.39 million, mainly due to lower sales from the natural decline in production from its mature Qld gas fields. No dividend will be paid.
Ross Mining is pleased to announce an operating profit before tax and abnormals of $7.5 million for the financial year ended 30 June 1998.
The profit was realised from sales of 81,495 ounces of gold (up 2.5% on the previous year) which generated revenues of $44.8 million. The realised spot price averaged A$542 per ounce of gold, approximately A$65 above the average 1997-1998 spot price. Gross profit from operations totalled A$17.5 million, equivalent to 39% of sales revenue.
In view of the low prevailing spot price, the Company has re-evaluated its ore reserves. As a consequence, the Board considered it prudent to write down the carrying value of the Group's capitalised exploration and development costs in respect of its Australian operations to better reflect the current recoverable value. This resulted in an abnormal write down after tax of A$24.4 million and an overall loss for the year of $17.8 million after tax. No adjustment has been necessary to the carrying value of the Gold Ridge project in the Solomon Islands, where ore reserves have been expanded by 35% to 1.35 million ounces.
Total assets grew from A$129.5 million at June, 1997 to $166.9 million at June, 1998. Significant cash flows relating to investment activities included $83.1 million on mine development and property plant and equipment, principally on the Gold Ridge Mine in the Solomon Islands and Timbarra in northern New South Wales. A total of A$5.4 million was spent on exploration. The Group drew down a total of A$53.2 million under its debt facilities to finance the above mentioned mine developments.
The 1997-1998 financial year was characterised by building and developing the Company into a broadly based gold miner. Construction of the Gold Ridge mine in the Solomon Islands and the securing of permits for the development of the Timbarra mine in northern New South Wales dominated the year. At the same time, and despite the write down, the Group's overall ore reserve position was expanded and the profitable life at the Yandan Gold Mine in Central Queensland was extended.
The Company now holds a unique position within the Australian gold mining industry, with three new mines opening in the 1998-1999 financial year. The Gold Ridge Mine poured its first gold in August, 1998 and is now in the final stage of wet commissioning. The Timbarra Gold Mine is in full construction, with the first gold pour scheduled for the second quarter of this financial year.
The Yandan Mine will continue its operations until January, 1999 when the plant will be moved to Wirralie for the processing of oxide ore.
The Group's gold production is scheduled to more than double during this financial year to more than 160,000 ounces of gold. The Company can look forward to profitable operations in the current financial year. In these circumstances, the Board is pleased to recommend a fully franked dividend of 2 cents per share in line with the dividend paid in each of the last four years. Also, the Dividend Reinvestment Plan will be available to those shareholders who wish to increase their investment in the Company.
In line with the increase in gold production, the Company's hedging position has been increased to a total of 620,000 ounces of gold at an average deliverable price of A$542. Put options covering 253,000 ounces were also placed during the year.
BHP will temporarily shut down (for 18 days from 28 September) the rolling mill at its Whyalla steelworks due to falling demand for exports.
Cultus has posted a $32.5 million loss for 1997/98, mainly due to a$38.8 million abnormal loss (exploration provisions). Cultus also advised it has sold its Otway Basin exploration and production assets to Boral for $37.1 million.
Stockbroker D.J. Carmichael has placed GCR on its ALERT watchlist, as any exploration success by Newcrest at GCR's 3 major porphyry Cu-Au JV projects could prove to be a company maker.
QNI has recommended shareholders reject the "unsolicited" bid from Billiton, saying the offer was clearly designed to exploit a downturn in the commodities market and the weakest share prices since 1993.
Rio Tinto has posted a 10.4% increase in interim net profit to $849 million and declared a 27.96 cents/share fully-franked dividend. The weaker A$ more than offset lower commodity prices.
Santos has reported a significant gas flow from its Moolion North-1 well in the Patchawarra east block in the Cooper Basin, to the north of the Moomba gas plant. The well flowed at 252,000 cubic feet of gas/day and is within 1km of an existing gas pipeline.
Brandrill posted a 23% jump in full-year net profit to $4.28 million, mainly due to new long-term contracts in iron ore and base metals projects. A 3 cent unfranked final dividend was declared.
The Board of Directors of Finders Gold NL ("Finders") is pleased to announce that B. Vijaykumar Technical Services Private Limited ("BVTS") has entered into a Joint Venture Agreement (JVA) with the Government of Madhya Pradesh ("GOMP") and the Madhya Pradesh State Mining Corporation Limited ("MPSMCL") to jointly undertake exploration and mining for diamonds and other minerals in Block D-7, south-east Madhya Pradesh, India.
Finders currently holds a 20% share equity in the BVTS, with the option to increase its interest to 30% prior to the completion of a bankable feasibility study.
A new joint venture company, B. Vijaykumar Exploration Private Limited ("BVE") has been registered and is presently being incorporated under the laws of India and Madhya Pradesh to undertake these activities.
The BVTS will hold a 89% equity interest in BVE, with MPSMCL holding a 8% free carried interest and GOMP holding a 3% free carried interest.
Hargraves posted a 24% juml in full-year net profit to $4.58 million, mainly due to higher gold production (70,262 ounces at cash costs of $238/ounce) from the upgrading of its Browns Creek plant in NSW from 240,000 tpy to 400,000 tpy. A 1.5 cent unfranked final dividend was declared.
Hargraves is to cut exploration costs from $9 million to $3 million and will focus on developing the Browns Creek orebody (current resource of 3.26Mt @ 4.16 g/t Au and 0.33% Cu).
Magellan posted a 16% fall in full-year net profit to $4.23 million, mainly due to reduced sales and lower crude oil prices.
Novus posted an interim loss of $14.6 million, mainly due to exploration write-offs totalling $34.8 million. These write-offs more than offset a $15.1 million abnormal profit on the sale of an Indonesian oil and gas production deal.
AMP increased its relevant interest in Novus from 6.21% to 7.67% and the Capital Group of the US increased its relevant interest in AMP from 7.23% to 8.25%.
Power group ED has increased full-year net profit by 23% to $8.7 million and declared an unfranked 2.1 cents final dividend.
Magellan has posted a 16% fall in full-year net profit to $4.23 million, mainly due to lower oil sales and lower crude oil prices. Magellan announced a 5¢ unfranked dividend (down from 10¢) and a 1:20 bonus issue.
Shares in Normandy have risen almost 22% over the past week as investors buy back into gold stocks.
Shares in QNI rose 2¢ above the 90¢ bid price from Billiton.
Resolute has posted a record $20.5 million profit in 1997/98 due mainly to increased gold production. The $319 million sale of the company's Bulong nickel mine to Preston Resources has strengthened the balance sheet. Resolute declared a 2 cents unfranked final dividend with a further 3 cents to be paid upon the settlement of the Bulong Sale.
Despite lower base metals prices, WM has recorded a record $10 million profit in 1997/98 and declared a final 1 cent fully-franked dividend.
Western Metals increased its relevant interest from 98.13% to 98.29%.
Bankers Trust decreased its relevant interest from 16.82% to 14.69%.
Portfolio Partners increased its relevant interest from 9.0% to 10.35%.
Gympie Gold has posted a 317% jump in profit for the year to 30 June to $2.3 million; sales rose 2.6% to $18.14 million.
Oil Search has posted a 24.4% fall in interim net profit to $9.9 million;. Sales rose 38% to $48 million; no dividend was declared.
AXA-UAP & National Mutual Holdings decreased its relevant interest in Oil Search from 7.90% to 6.73%.
Billiton has launched a $783 million takeover for QNI; the 90¢/share offer represents a 32% premium over QNI's last trade at 68¢.
Santos has posted a 17.7% fall in interim net profit to $84.2 million, mainly due to lower oil prices. Santos maintained a 12¢ fully-franked interim dividend.
Franklin Resources Inc increased its relevant interest from 5.0% to 6.03%.
Australian Kaolin has appointed engineering group Lycopodium to manage final construction and commissioning stages of the Skarden River kaolin plant in QLD. Commissioning of the plant is due shortly.
On 26th August 1998, the Chairman of Golden Hills Mining NL ("GHL") made an announcement that GHL had entered into a Heads of Agreement to invest in unlisted private telecommunications company, Davnet Pty Ltd ("Davnet") by the purchase of all the issued capital of Davnet. The text of that announcement is attached.
Davnet is an excellent example of an Australian technology company grasping a market opportunity to provide Internet and data communications connections to the tenants of premium CBD buildings. Investment by GHL in Davnet is expected to provide both an ongoing revenue stream and a strong growth outlook for shareholders.
This letter gives shareholders some additional information so that they are aware of the process that the company will now go through to finalise the investment and give GHL new life in the exciting IT/communications sector. The Directors will be recommending the investment to shareholders.
The Potoroo Prospect is situated north of the old Panama Goldfield within the Lisle Project. Previous soil and auger geochemical sampling had revealed highly anomalous arsenic and slightly anomalous gold along the track from Golconda to Panama.
Excavator trenching in the area of anomalous arsenic has revealed significant gold within granitic rocks just below a contact with sedimentary overlying rocks such as sandstones and shales. The main trench across the arsenic anomalous zone revealed 8m at 2.3g/t Au within a wider lower grade zone (which is at present open ended in both directions), of 69m at 0.55g/t Au. A second trench, displaced to the west from the higher grade gold in the first trench, recorded 46m at 0.25g/t Au.
The Crater Mt Project is located in a similar geological environment to the Porgera Mine and Mt Kare deposit. An earlier hole by BHP (only three were drilled when they were in a J/V with MACMIN and drilling for copper mineralisation), yielded a mineralised interval of 115m at 1.83 g/t Au including 3m at 14.16 g/t Au. The present drilling program will focus on testing an adjacent, untested, major gold in soil anomaly more than 600m by 1000m in area. This anomaly has peak soil values of 17g/t Au.
The program at Feni is managed by MACMIN but funded by Vancouver listed company New Guinea Gold Corporation. New Guinea Gold has a 25% equity in the Project and can earn a further 25% equity by sole funding the next C$2.0M of exploration expenditure.
There is widespread gold in drill core, soils and groundwater at Feni, which is also along trend from, and has comparable geology to the Lihir Mine. Feni has an open ended inferred resource of 180,000 ozs gold with typical drill intercepts from previous drilling, such as 114m at 1.12g/t Au and 20m at 2.6g/t Au.
MACMIN is at an advanced stage in negotiating a farm out/joint venture for its prospective porphyry copper/gold properties in New Britain, Papua New Guinea.
New Hampton Goldfields NL (New Hampton) and Mineral Commodities NL (MRC) wish to jointly announce the formation of a "technical and strategic alliance" in relation to ongoing developments in the Eastern Goldfields of Western Australia.
Whilst both are Victorian-based companies, New Hampton produces approximately 80,000 ounces p.a. from its production facilities at Jubilee, south of Kalgoorlie. It has a strong technical team and highly prospective exploration acreage in the broad region.
MRC on the other hand, through its interest in the Mungari West Joint Venture (MWJV) has a project at White Foil that offers a substantial mine life. The MWJV has a current resource of 770,000 ounces and is held 49:51 with Mines and Resources Australia Pty Ltd. The parties believe that the project has substantial further potential. The arrangement also contemplates the formation of a joint venture between the parties in the event that MRC becomes entitled to full ownership of the White Foil Project.
Nimbus Resources NL and The Broken Hill Proprietary Company Limited (BHP) are pleased to jointly announce the signing of a Memorandum of Understanding for the purchase by Nimbus Resources NL of the Hawks Nest mineral sands operation from BHP Titanium Minerals Pty Limited as part of BHP's portfolio restructuring programme. The purchase price consideration is approximately $9m, payable over 15 months from 1 October 1998.
The acquisition will also include the right to use the business name Mineral Deposits (MDL), which is a long standing and respected name in the Australian mineral sands industry. Nimbus will consider changing its name to Mineral Deposits Limited.
Hawks Nest is a well established project involving mineral sand dredging at two locations – Viney Creek and Fullerton - with dry separation occurring at Hawks Nest, producing premium grade rutile and zircon which finds ready acceptance in world markets.
Paladin has farmed into the Kambalda West gold JV under an agreement with Central Kalgoorlie Gold Mines. Paladin and Ranger Minerals can now earn an 80% interest by spending $2.5 million over 5 years.
3 petroleum permits on the edge of the Bonaparte Basin have been awarded to a joint bidding group of which Tap Oil holds 17%.
Western Metals admitted yesterday that it was surprised by the size of the abnormal loss announced by its recent acquisition, Aberfoyle. Aberfoyle reported a net loss for the full-year of $22 million, including a pre-tax abnormal charge of $26.5 million.
BHP's world minerals group general manager, Tim Winterer, will retire on 31 October without a successor to take his place.
Following the Company's announcement of 26 August, 1998, informing shareholders that GHL had entered into a Heads of Agreement to invest in unlisted private telecommunications company Davnet Pty. Ltd., the Company would like to inform shareholders as follows:
The Board of GHL will advise shareholders of the dates of the Annual General Meeting and Extraordinary General Meeting in the near future.
Portman reported a slight fall in net profit for the 6 months to 30 June to $10.26 million and said it would struggle to better its first-half result in the second half due to tough market conditions.
Centaur has posted a $4 million loss in 1997/98, much improved on the $9 million loss in 1996/97. The improved result was boosted by a 42% jump in sales revenue to $101 million - 197,215 ounces of gold sold @ $513/ounce. Gold production totalled 194,995 ounces at a cash cost of $391/ounce ($430/ounce in 1996/97).
Delta Gold announced a 97% jump in full-year earnings to $68.5 million, mainly due to record output at the 2 mines in WA. Group production increased 54% to 350,000 ounces at a cash cost of $174/ounce. Total costs after amortisation and depreciation were $219/ounce. A doubling of dividend to 6¢ was declared.
Nimbus has purchased BHP's Hawks Nest mineral sands business, including the processing plant, in NSW for $9 million. The sale also includes dredging operations at Viney Creek and Fullerton.
Maple Brown Abbott increased its relevant interest from 6.42% to 7.52%.
Rio Tinto has signed an agreement with the Federal Government aimed at boosting employment in Aboriginal communities around its Australian operations.
Savage has denied speculation that it has been approached by a potential buyer after talk emerged yesterday of a possible $500 million bid for the group.
Queensland Premier Peter Beattie officially launched construction of WMC Fertilizer Ltd's $700 million Queensland Fertilizer Project (QFP) at Phosphate Hill, in the State's North-West Minerals Province. The operation will consist of a mine, Phosphoric Acid Plant, Ammonia Plant and a Granulation Plant at Phosphate Hill and a Sulphuric Acid Plant at Mount Isa. The Ammonia Plant will utilise natural gas sourced from south west Queensland and transported by AGL's pipeline. For the first time the phosphate resource will be used to manufacture ammonium phosphate fertilizers for domestic and overseas markets.
In August, WMCF signed a marketing agreement with the Fertilizer Division of Cargill Inc covering the export of up to 500,000 tonnes per year of the QFP product for five years. This agreement completes marketing arrangements which will ensure that the Project sells every tonne of fertilizer produced in the next five years.
BHP is said to be one of 17 companies to have expressed an interest in participating in the $3 billion Camisea gas project in Peru.
Under instructions from Philippine Gold Plc, Minasco is offering significant equipment from 4 mines for sale - due to major upgrading of existing plants and equipment.
QCT has recorded an 8% increase in full-year net profit of $45.7 million, mainly due to increased sales, reduced costs and a lower A$. Final dividend has increased from 3¢ to 4¢, fully-franked.
Canadian company TransAlta Energy and Australia's AGL Power Generation plan to build a $110 million co-generation power plant at QNI's Yabulu nickel refinery near Townsville in QLD. The 150Mw facility will replace an existing coal-fired plant and will have a major economic impact for QNI. QNI will take up to 30Mw of the plant's electricity for its refinery.
Mr R J Lamble has advised of his resignation, for family reasons, as a Director, with immediate effect.
Over the past eight months the Board of Ballarat Goldfields N.L. has developed and implemented a new Business Plan. The objectives of the strategic plan are to diversify risk and establish cashflow to facilitate growth. To these ends, the Company has recently announced several new acquisitions and a proposed merger. The next major plank in the strategy is to position the Company to access new capital funding when market conditions improve. In order that this may occur in a planned manner, Directors believe that the Company's capital structure must be reorganized.
The Board therefore intends to recommend to members the creation of a Trustee Stock Scheme, allowing staged fund raising potentially meeting the scheduled capital needs of the group's medium and long term projects. As part of the scheme provisions, Directors will recommend that a 1 for 10 capital consolidation be implemented.
Capricorn announces the appointment of 3 new directors - Mr Chris Barker, Mr Peter Ironside and Mr Paul Evans. The appointment follows the resignations of Mr Murray d'Almeida and Mr Adrian Lee, both due to the pressure of outside business.
The Board of Newcrest Mining Limited today announced the appointment of Mr Ian Johnson and Mr Peter Smedley as non-executive directors of the Company. Their appointments take effect on Wednesday 2 September 1998.
OCA has posted a 25% fall in annual net profit to $13.1 million, due to lower sales on natural gas from the Surat Basin. The result includes $3.1 million in writedowns due to unsuccessful drilling. A fully-franked 2¢ final dividend was declared.
Petroz announces that Springbok-1, a wildcat exploration well, located in TP/12 in the carnarvon Basin, has been plugged and abandoned. No significant hydrocarbons were encountered.
SUMMARY - HALF YEARLY REPORT TO 30 JUNE 1998
Chevron has moved a step closer to proceeding with a $1.5 billion PNG gas project following the signing of a memorandum of understanding with Comalco for future gas supply (initially at least 27 petajoules of gas/year) - providing Comalco proceeds with its $1.4 billion alumina refinery at Gladstone, QLD.
ERA Full Year Results to 30 June 1998
Envestra has posted a net loss of $7.1 million for the year to 30 June - $4.3 million better than prospectus forecasts. Lower operating costs helped Envestra achieve a $7.8 million operating profit before interest on loan notes and tax; Envestra will pay the full 7.75¢ a stapled security payment and expected to deliver an increased 8.15¢ payment this year. Envestra will continue to pursue gas network acquisitions.
Annual Results to 30 June 1998
The North Board today announced a net profit (before an abnormal item of $68 million) of $171.7 million, a 27% increase over the 1996/97 results. The net profit after an abnormal write-down of $68 million for the Company's interest in Minera Alumbrera Limited was $103.7m. Earnings per share before the abnormal item were 23.6 cents per share compared with 18.9 cents per share for 1996/97.
NORTH GROUP CONSOLIDATED RESULTS
| 12 MONTHS to 30/06 | Variance | ||
| 1998 | 1997 | % | |
| Sales revenue ($m) | 2,263.6 | 1,465.0 | 54.5 |
| Operations earnings before interest and tax ($m) | 546.8 | 379.7 | 44.0 |
| Net profit before abnormal item ($m) | 171.7 | 135.0 | 27.2 |
| Abnormal item ($m) | (68.0) | - | - |
| Net profit after abnormal item ($m) | 103.7 | 135.0 | (23.2%) |
| Earnings per share after abnormal (cents) | 14.3 | 18.9 | |
| Final Dividend per share (cents) | 9.0 | 9.0 | |
| Gearing (Net Debt, including Alumbrera) % | 40.5 | 37.7 | |
YEAR IN REVIEW
| Including IOC | Excluding IOC | |
| Sales Revenue | 54.5% | 16.0% |
| EBIT | 44.0% | 16.5% |
Crest Resources has received approval to change its name to Crest Magnesium NL. Earlier this month Crest said it had received an offer for 45,000 tonnes of magnesium alloy / year for a 10-year period.
Drillsearch has signed a deal with Albania's State oil company Albpetrol, to sell all of the production from the Cakran-Mollaj and Ballsh-Hekel fields. Drillsearch says its maximum production cost in Albania is US$3.75/barrel.
Gilt-Edged has announced encouraging drill results from its East Kundana JV in WA, including 11m @ 3.73 g/t Au and 2m @ 101.35 g/t Au. Both intersections were at shallow depths.
Golden Cross Resources NL recorded positive drill results from its 100% owned Kempfield silver property near Blayney, NSW. The property is subject to a 5% net profits interest.
Twelve reverse circulation percussion holes for 889m have been drilled at Kempfield in a programme aimed at expanding the silver resources indicated in several zones by previous drilling.
GTR is expected to seek a partnership with a major motor company to help finance its proposed $700 million magnesium metal project in Tasmania. A feasibility study released on Friday found the 80,000 tonnes/year magnesium metal plant was justified, given that demand from the motor vehicle industry was expected to grow at 14% per year for the next 10 years.
GTR is also examining a magnesium metal refinery at its Woodsreef prospect in NSW.
A commercial-sized (1.7 carats) microdiamond has been discovered at the Jewill prospect in the Naberru basin in WA. The diamond was recovered from excavated kimberlitic volcanic material.
International concerns have adversely affected the prices of most metals with analysts warning a flood of supplies from Russia, especially for platinum and palladium. In addition, demand for these metals would shrink if there was a world-wide contraction in demand/consumption. Another negative factor was the growth of stocks in China with expectations of large exports in the coming weeks.
Lion Selection Group is to pay $6 million for a placement in Spinifex enabling Spinifex to carry out additional exploration on its Tanzanian properties (through its 49.5% owned East Africa Gold Corp). Spinifex's combined gold resources in this area so far totals 438,500 ounces.
Ashton announced a 75% fall in interim earnings to $6.2 million due to a slump in demand for diamonds and security problems at the Cuango project in Angola. Last year's interim profit was also boosted by a $24.3 million abnormal gain from the sale of its stake in Helix Resources.
Ausdrill posted a fall in full-year profit from $9.4 million to $4.1 million.
Caltex posted an interim net profit of $40.3 million for the 6 months to 30 June, well up from the $11.3 million in the corresponding previous period. This was mainly due to cost reductions. A 10¢ fully-franked interim dividend was declared.
Energex has secured more than 97% of Allgas Energy's ordinary stock, but a question remains over the fate of 200,000 preference shares.
Mobil and Shell announced a $2 billion JV that would account for half the nation's 8 refineries. The anticipated start-up for the JV is January 1999.
AGL has reported a 33% jump in annual net profit to $196.4 million, primarily due to increased gas sales. AGL is paying a final, part-franked, 22¢/ share dividend (up from 20¢).
Ashton yesterday raised the prospect of a potentially higher annual profit while hosing down market concerns over security issues at the Cuango project in Angola.
Aurora has reported an interim net profit of $9 million, up 11% on the 1996/97 first half due to higher gold and silver sales from its Mt Muro operation.
BHP announced it would spend $10 million upgrading the beneficiation plant at its Mount Whaleback iron ore mine in WA. The move will increase production from 4.5 mtpy to about 6 mtpy.
Centennial Coal has posted a 16% increase in full-year net profit to $2.7 million, mainly due to cost cutting and repositioning its sales in favour of the domestic market. The final dividend is a fully-franked 3¢/ share.
Consolidated Rutile has posted a full-year net loss of $14.4 million, mainly due to an abnormal loss of $33.5 million related to its stalled African mineral sands operation. Operating profit before tax and abnormals was up 60% to $19.1 million.
The Prospectus for Silver Rose was released yesterday. The $8 million float comprises 40 million shares @ 20¢ each. The company's objective is to become a major mining house focusing on silver.
The Chairman of Golden Hills Mining NL ("GHL"), Mr Peter Dunn today announced that GHL has entered into a Heads of Agreement to invest in the unlisted private telecommunications company Davnet Pty Ltd ("Davnet").
Mr Dunn said that this marked a turning point for GHL and gave the company and shareholders the opportunity to become involved at the forefront of high technology communications delivery.
Davnet is currently providing infrastructure in the Melbourne and Sydney Central Business Districts with the aim of becoming the largest supplier of internet and data communications connections for the tenants of premium CBD buildings through the use of innovative aggregation technologies. Davnet is providing clients with high performance, efficient and affordable delivery of corporate private TCP/IP over ethernet services using its own direct digital network.
RGC has reduced its losses in the 12 months to 30 June to $46.1 million (previously $78 million).
The major technical aspects of the Preliminary Feasibility Study (Stage II Mining Study) at Emily Ann is almost complete. Hydrological investigations have idebtified greater volumes of groundwater than anticipated and delays in the completion of the Final Study are expected. Delays are also anticipated as the Final Study will be required to take into account the currently depressed nickel prices.
Pasminco has posted a full-year net profit of $7.1 million (a loss of $12.4 million in the previous year) . A 4¢ dividend (up from 3¢) was declared.
RGC says it has 30 gold mining companies interested in purchasing its 56% stake in Goldfields.
Pasminco has posted a 2% fall in full-year net profit to $63.3 million,despite an abnormal gain of $23.7 million (from a reduction in environmental provisions in the Netherlands). A 4¢ unfranked dividend was declared.
QNI has posted a 70% fall in full-year net profit to $9.34 million, mainly due to plummeting nickel and cobalt prices and an abnormal loss of $10.1 million (mainly write-downs). No dividend was declared.
Rio Tinto says it has terminated an agreement with Australian Gold Fields for the disposal of shares in the Wafi gold project in ONG. New Sage Resources will instead earn 45% of the project after completing a due diligence.
ANI has posted a 37% fall in annual net profit to $19.23 million, mainly due to abnormal losses from its Holter waste processing operations in Europe. ANI declared a final fully-franked 1¢/share dividend.
Clough has posted a full-year net profit of $27.39 million and declared a 1¢ part-franked dividend.
The board of directors of Victorian based Golden Hills Mining NL ("GHL") is pleased to announce that it is finalising negotiations to invest in a Melbourne based technology business. This investment is expected to give the Company a firm direction, continuity of cash flow and the potential for growth. GHL's directors are working with Intersuisse Corporate Pty Ltd to structure and fund the development of an expanding business.
The board has requested the Manager Companies of ASX Ltd to implement a Halt to Trading for the shares and options of GHL pursuant to Listing Rules 17.1 until completion of trading on Tuesday 25th August 1998.
The board expects to make an announcement on Wednesday 26th August 1998 following the completion of negotiations.
SOG has concluded the sale of its oil and gas royalty interests in Cambridge Petroleum to Frontier petroleum for $11.03 million. SOG has also purchased 7.14 million shares in Frontier at 14¢/share as part of Frontier's recently completed rights issue. The purchase is the subject of a put and call option deed with underwriter D F Mainland.
Frontier is currently the subject of a scrip takeover by West Oil.
Alinta Gas (WA's state-owned gas utility) announced an increased net profit for the year to 30 June, before abnormals and extraordinary items, of $39.7 million; after abnormals and extraordinary items the net profit fell to $20.7 million, reflecting an abnormal loss of $29.5 million after the company restructured its debt portfolio to take advantage of lower interest rates.
Comalco has reported a 78% jump in interim net profit to $123.8 million, mainly due to significantly higher aluminium production from the 3 smelters - Boyne Island, Bell Bay and Tiwai Point, and a cost reduction program. Lower prices were offset by the weaker A$. Comalco increased the interim divident from 7¢/ share to an unfranked 10¢/ share.
EA reported a 63% fall in the June half from $4.3 million to $1.6 million; dividend was halved to a fully-franked 2¢. Analysts believe the company is 'available' for a take-over.
Empire has spudded its first well - Gingin-3 in the Perth Basin. The well is planned to a depth of 4,100m and aims to tap cheap gas to sell into the deregulated WA market. It lies about 3km from the Parmelia gas pipeline.
RGC has agreed to sell its Renison tin mine in Tasmania to Murchison for $40 million plus royalties.
Equi Gold has completed the purchase of the Mt Rawdon gold project(measured and indicated resource of 24.8 million tonnes @ 1.15 g/t Au and 4.4 g/t Ag. from Resolute and Samson Exploration. EG has paid $7.5 million and a further $1.5 million to Resolute for a ball mill located at Resolute's Southern Cross project.
Gullewa has sold its Gullewa resource and treatment plant, 300km north of Perth, for $4 million to a private company.
Hardman has acquired two offshore oil exploration areas in Malta; the areas are due south of Italy and 70km from the Vega field which has 300 million barrels of recoverable oil.
Recent drilling at the Tampia Hill gold prospect, 250km east of Perth, encountered encouraging results including 18m @ 5.35 g/t Au and 6m @ 16.08 g/t Au. In addition, geochemical sampling to the north of the known mineralisation had delineated a 1110m x 300m anomaly, which extended the target area to a strike length of 2300m.
Otter has announced some very encouraging drilling results from its Banjo prospect, 32km west of the Otter Gold Mine's Tanami operation in the NT. The recent results had defined 2 zones of mineralisation 500m apart, and included 18m @ 10.3 g/t Au, 28m @ 3.7 g/t Au and 24m @ 8.8 g/t Au.
Probe has advised that its Mokhti oil project in Russia has been part-funded, with the recent issue of 5 separate promissory notes of US$1 million each.
Wells Gold has agreed to a farm-in by Goldfields to its Mt Celia project in WA. Goldfields will spend $775,000 to earn an 80% stake.
WMC is close to a decision on commissioning 3 giant open-cut mines (the Leviathan Project) to revive its faltering St Ives gold complex near Kalgoorlie in WA. The 3 open-cuts would produce a total of 4.5 million tonnes of ore, grading 3.7 g/t Au, per year.
One investor selling its stake in Novus has been blamed for a fall in the share price.
Perseverance is seking to raise $30 million to expand its Fosterville gold operations. Funds will be raised through debt and equity with Macquarie bank and Rothschild offering to supply the $15 million debt component. The remaining $15 million will be raised through a rights issue, which may be increased to $20 million to fund more exploration.
Tap Oil has posted an annual net profit of $4.17 million.
Alcoa says it will not take up its pre-emptive rights to the Vic Government's 25% stake in the Portland aluminium smelter. Alcoa has a 45% stake.
An Feng Kingstream Steel is expected to be the target of a $250 million-plus takeover bid following an announcement yesterday that the group's major shareholder was negotiating the sale of "a substantial parcel of shares". An Feng Kingstream shares rose 4.5¢ to 19¢.
ERA has announced a 74% fall in net profit in 1997-98 to $26.73 million, mainly due to lower production related to chemical problems at its Ranger uranium mine. The company declared a steady final, fully-franked 8¢ dividend.
CIM has announced a 34% fall in after-tax profit in 1997-98 to $2.4 million, mainly due to weaker coal prices and an abnormal loss of $899,000 - from a $3.4 million write-down of its Cumnock Coal stake which failed to offset a profit on an AMX Resources sale.
Normandy has announced full-year earnings fell 3.8% to $118.8 million, mainly due to increased exploration expenditure at its La Source gold project; total exploration provisions jumped from $61.2 million to $103.7 million.
Normandy's gold operations performed well over the year with production costs down 4.5% to $321/ounce. Normandy's base metals arm showed a slight increase in pre-tax earnings - boosted by gold credits. The company declared a steady final, fully-franked 3.5¢ dividend.
Savage has named the National Australia bank as the arranger of a US$750 million capital facility to fund the expansion of its zinc refinery at Clarksville, Tennessee. The funds will also be used to refinance the Ernest henry copper/gold project and provide working capital.
WS has announced a 16% jump in first-half earnings to $10.13 million. Sales revenue is up 42% to $70.5 million and a steady 8¢ fully-franked dividend was declared.
Global gold demand jumped 50% in the June quarter according to the World Gold Council; strong demand in Europe and the US more than offset the weakness in Japan and other Asian markets.
Australia's largest independent power producer is the foundation customer in Gladstone for the multi-billion Chevron pipeline project, with its development of a $300 million gas-fired power station at Gladstone.NRG Asia Pacific
Petroz advises that it has farmed into 2 onshore exploration blocks in Italy (140km east of Rome). Drilling is currently in progress.
Petroz will contribute to the cost of drilling the Setteporte-1 exploration well. Upon completion of drilling, Petroz has the option to acquire a 155 interest in the Roccasicura and Duronia permits at no further cost. Target depth is 3100m (Cretaceous to Miocene Apulian Carbonate) and should be completed in October.
The Company wishes to announce that it has entered into an agreement for the supply of gas over a 15 year period with a Western Power Corporation/AGL Gas Trading Pty Ltd joint venture for the supply of natural gas to the Windimurra Vanadium Project located near Mt Magnet in Western Australia.
The Supply Joint Venture will construct the Mid-West Gas Pipeline from the Dampier to Bunbury gas pipeline to supply gas to consumers in the mid-west region of Western Australia, of which the Windimurra Vanadium Project will be the foundation customer.
This agreement provides the project with a long-term secure source of gas for process energy to fire the rotary kiln and for power generation, The Supply Joint Venture has contracted to have gas delivered to site by September 1999, prior to plant commissioning.
Woodside has announced a 7% fall in interim net earnings for the half-year to $140.6 million; higher production levels and a lower Australian dollar were more than offset by lower oil prices. Woodside is paying a fully-franked 9¢ final dividend (previously 8¢).
Woodside is to delay - by at least 6 months - its $6.5 billion expansion plan for the North West Shelf gas project, mainly due to the slowdown in the Asian region.
Shareholders in WS will not get to vote on the company's merger with RGC. Tha ASX has confirmed that WS does not have to call a shareholders'meeting.
BHP Petroleum has identified a further $100 million in cost cuts this financial year, including a $54 million reduction in its exploration budget from $414 million to $360 million.
In the 1997/98 year the division reported a $672 million after-tax profit, excluding abnormals.
BHP Petroleum also announced encouraging hydrocarbon results at its Atlantis-1 and Neptune-2 wells in the Gulf of Mexico.
MIM announced a better-than-expected $80.4 million net profit for the year to 30 June, up 31% on last year. A part-franked 1.25¢ dividend will be paid.
Petroz advises that it has farmed into 3 adjacent exploration permits (TP/12, EP 398 & WA-216-P) in the Carnarvon Basin, offshore WA. Petroz will earn a 30% interest in TP/12 & EP 398 and a 22.5% interest in WA-216-P by contributing to the cost of drilling the Springbok-1 exploration well (in TP/12).
Hartley Poynton issues a Buy recommendation for PMA.
Glencore's commitment to the Windimurra project gives the green light to development of a 16mlb/year vanadium operation. Major lead items have been ordered allowing commissioning of the project by the fourth quarter of 1999. PMA shares are significantly undervalued. Our base case valuation of PMA's 49% share of the project is $1.54/share. We have used a conservative vanadium price forecast of US$4.50/lb in our valuation some 25% lower than the current price of US$6.00/lb. The project will definitely go ahead now, so downside risk is significantly reduced. Our short term share price target is A$0.85 and our longer term (18 month) target is A$1.50/share.
Santos revealed production at its Elang/Kakatua and Stag oil fields in the Timor Sea had exceeded expectations - output was running at 36,000 barrels/day (original forecast was 32,500bbls/day). In addition, total production at the Stag oil fields had risen to about 15,000 bbls/day, compared with 10,444bbls/day last month.
SOG has announced a record $62.7 million net profit for the year to 30 June, boosted by a record June quarter where the company produced 135,557 ounces @ $350.43/ounce. SOG is to pay a fully-franked 12.5¢ final dividend. SOG expects to produce 490,000 ounces in the current financial year.
BHP's North American copper operations may need to pay up to US$33 million as part of a 3-way settlement with the State of Arizona for the clean-up of acidic metal-bearing groundwater at 2 mining sites (Pinal Creek - Old Miami and Old Dominion Mine sites).
Merritt now holds 12.6% of the shares in Alliance Gold Mines NL.
Wayne Dimech has resigned as a director of Merritt Mining NL to concentrate his efforts on Richfield Resources NL of which he is Managing Director. He has ceased to be a substantial shareholder of Merritt.
Normandy subsidiaries Normandy NFM & Normandy Leyshon have increased combined annual earnings to $66.4 million after cost-cutting offset lower production at NFM's Northern Territory operations.
Normandy Leyshon reported a 40% jump in profit to $30 million and directors increased the final dividend by 5¢ to 20¢ a share.
Normandy NFM reported a 5% fall in net profit to $36.4 million, mainly due lower throughput relating to milling of harder ore. Final dividend has been reduced from 25¢ a share to 10¢ a share, and the company has introduced a dividend reinvestment program.
Deutsche Bank Research issues a Buy recommendation for PMA.
SMC Resources Limited (SMC) is a gold miner located in the highly prospective Charters Towers gold field, 130km west of Townsville, North Queensland. The Company owns the Hadleigh Castle mine containing an indicated/inferred resource of 287,000 oz gold. SMC focuses strongly on the profit margin from mining operations to ensure a growing cash base to enable acquisition and exploration for additional resources to permit mining expansion.
Currently, SMC plans to treat approximately 600,000 tonnes to produce 108,546 oz gold at a cash cost of $AUD333 per oz over the mine life (total cost $AUD360). The projected average mill head grade is 6.12 g/t gold. The Hadleigh Castle ore bodies are open at depth. Therefore, it is likely that the mine life will be extended.
Brandrill has won a $30 million contract for work (excavation of incline, decline and level tunnels) at the George Fisher lead-zinc project at Mt Isa.
The Sukari gold project in Egypt has an estimated resource of 1.8 million ounces of gold at a 1 g/t cut-off.
Hunter is in the final stages of acquiring an option over several large tailings dumps at Lebanon, in the US State of Pennsylvania. The dumps contain between 8 and 20 million tonnes of economic concentrations of cobalt, copper and possibly some gold credits.
Pan Pacific has announced a profit for the year to 30 June of NZ$1.89 million, more than double the previous year (NZ$924,000), mainly due to profitable production from the Chervil and Tubridgi gas fields in the Carnarvon Basin.
Redfire has entered a JV with a private company in the Murray Basin over a 56 sq km area near Lameroo, SA. The area is 8km west of the recent RGC heavy mineral discovery at the Matilda prospect. Redfire said interpretation of satellite imagery and coloured air-photos indicated a series of strand lines crossing the tenement.
Despite the expected fall in demand from Asia, Woodside is pressing ahead with the expansion of its North West Shelf Project; first deliveries from the new facilities are scheduled for 2003.
Icon reports that drilling operations have been delayed due to flooding caused by unseasonal rains over the past few weeks. The rig has been contracted to a third party for an eight-week programme and on completion will return to drill the first of a four well programme planned for the Surat Basin.
If current negotiations are successful Icon will be involved in nine wells over the next 9-12 months in Australia and the USA. These wells will be at no cost or minimal cost to Icon as they have mostly been farmed out to joint venture partners.
Icon is in the final stages of negotiating with a Dallas (USA) based oil company to farm-in to three wells in the Surat Basin. The three farm-in wells are to be drilled in ATP620P and ATP626P near the Moonie Oilfield. New seismic work has been completed over these new prospects which have potential reserves exceeding those of the Moonie Oilfield of 25,000,000 barrels. Icon will continue to operate the drilling programme.
A fifth well is planned in ATP594P in the Cooper Eromanga Basin in late October but timing is subject to rig availability.
Plans are well advanced to participate in two exploration programmes in Colorado and Montana in the United States. The programme includes three wells in Montana where Icon will have a 35% working interest and one in Colorado where Icon will have a 100% working interest. Further negotiations are being conducted to obtain production interests and income in the USA.
Icon has concluded its farm-in programme as outlined in the prospectus and has added several new areas to its portfolio which have increased the prospectivity of Icon's overall acreage holdings in Australia. The only exception is the remaining farm-in well in ATP620P which is being farmed out to US interests.
Icon has joined a study group in the Bonaparte Gulf on the northwest shelf of Australia and if warranted, intends to participate in any final bid to the level of a 25% working interest. For additional information on Icon Oil, click here.
Sunvest Corporation Limited has increased its substantial shareholding to 6,312,409 shares being 11.76%. For additional information on Merritt, click here.
Petsec has slumped to a net loss of $31.1 million for the 6 months to 30 June, mainly due to a pre-tax abnormal loss of $53.5 million. petsec says the losses relate to 'dry hole and impairment costs' at its West Cameron 480 well.
Woodside and Shell announced they were strengthening their operational ties in Australia - aimed at pursuing profitable growth for both companies. many analysts see it as a precursor to Shell taking control of the 32.47% owned Woodside.
GCM announced a steady profit after income tax of US$22.6 million (1997 US$23.3 million) on sales of US$225.1 million (1997 US$146.6 million). The sales revenue was a 53.5% increase over the prior years sales as a result of the increased contributions from Bronzewing and the contributions from Nimary and Wiluna. The revenue was a result of the sale of 647,600 ounces of gold (1997 441,800 ounces) at an average realized price of US$348 per ounce (1997 US $331) which was US$84 per ounce (1997 US$53) greater than the average spot price for the year of US$270 per ounce (1997 US$278).
Earnings per share were US$0.0799 cents (1997 US$0.0919 cents).
The directors have declared a steady final dividend of A$0.03 cents per share (unfranked). The discount rate on the dividend reinvestment plan had been set at 10% for the final dividend. The Company's bonus share plan had been suspended as a result of changes to the Corporations Law on June 30,1998.
The past year was a year of consolidation of the land holdings in the prospective Yandal and Wiluna Belts and the Company looks forward to further growth in future years.
Mr Henry T. Fabila MBE was appointed a Director of MACMIN N.L. effective 13 August 1998. Mr Fabila is the Managing Director of the National Provident Fund of Papua New Guinea which is a substantial shareholder in MACMIN. Mr Fabila has approximately 25 years of banking experience in Papua New Guinea and is a director of several other public companies.
Merritt Mining NL is pleased to announce that it has become a substantial shareholder in Alliance Gold Mines NL by taking a placement of 12 million Alliance shares at 1.75 cents each. Merritt has also agreed to underwrite a 1:1 non-renounceable entitlements issue of Alliance shares at 1.0 cent each.
Peter P Andrews, the Managing Director of Merritt, has accepted an invitation to join the Alliance Board. John S F Dunlop who is already a Director of Merritt and a Director of Alliance has become the Alliance Chairman.
Merritt has taken this position in Alliance because of its recommencing gold production at Maldon and its two exciting gold exploration projects at Maldon and Creswick in Victoria. For additional information on Merritt, click here.
QMC has posted its inaugural annual net profit of $3.5 million, a substantial turnaround from the $57.16 million loss the previous year (included an abnormal loss of $49.18 million). Sales were up 62% to $70.14 million. QMC owns the world's largets cryptocrystalline magnesite deposits in Qld through unit QMAG.
A national deregulated gas market moved a step closer to reality with the completion of a $50 million pipeline which will allow NSW to access gas from the Bass Strait, and Victoria to access gas from the Cooper Basin via NSW. AGL is supplying the first gas to flow in the pipeline to Energy 21, one of Victoria's 3 new gas retailers. Under a second contract, AGL will provide a standby gas facility to assist Vic's 3 retailers to meet peak loads more efficiently.
Anaconda has signed a $100 million JV deal with Cobra. Under the deal, Anaconda will take a 70% interest in 2 laterite nickel deposits(near Greenvale and Marlborough) in Qld and a larger resource (Wowo gap) in PNG. Under the deal, Anaconda will boost its lateritie nickel resources to about 500 million tonnes.
Ashton announced the immediate resignation of chairman Nobby Clark and managing-director John Robinson. Mr Clark was replaced by Paul McClintock, who is associated with Ashton's major shareholder, Malaysian Mining Corp.
BP is buying Amoco for $80 billion in stock in what will be the largest industrial merger in history.
Reported in Access Economics latest Economics Indicator, the new forecasts show:
Orogen announced a 23.5% fall in interim net profit, mainly due to lower gold and oil prices. Despite the fall, the dividend was slightly higher at 4.5 toea (4.41¢).
Ross Mining NL is proud to announce that the first gold pour from the Gold Ridge Mine in the Solomon Islands took place yesterday. This marks the beginning of mining operations at Gold Ridge, which are scheduled to produce a minimum of 100,000 ounces of gold per annum. The gold pour was part of the commissioning process of the two million tonnes per annum gold ore processing plant, which is progressing according to schedule.
A program of IP Survey has been authorised on the 100% owned Aurex Property in the Mayo mining district for immediate commencement.
A second program of magnetometer VLF survey is to be conducted on the 100% owned Revenue Creek property in the Carmacks district. The results of these surveys should be available in early September 1998.
Merredin
Byro
Bow River
Ragged Range
China
Audax is set to acquire the prized Bronzewing South mining tenement in WA after it emerged director Leith Beal, through his personal company, Hot Holdings, is likely to be granted formal title to the disputed lease, subject to native-title procedures.
ANI will close its foundry in Brisbane as part of a restructure; foundry operations are due to cease by February 1999.
Browns Project, NT
Mine Planning Studies:
Prefeasibility Study
Condemnation Drilling
Alectown East Project, NSW
During the Quarter GHL has:
The Company has been investigating the potential to become involved in an integrated industrial mineral and environmental engineering business which may provide the opportunity to:
The Board hopes to advise shareholders of progress during the September quarter.
The gold price has remained depressed throughout the period ranging from USD 284 to USD 314. Fluctuations in the Australian dollar from 58c to 66c gave temporary highs in the A$ gold price of around A$480. GHL continues to deliver gold against a forward price of A$447.
Millrose Gold Project
Highlights For The June 1998 Quarter :
|
Aquarius' wholly-owned subsidiary, Kroondal Platinum Mines, has listed on the Johannesburg Stock Exchange following a $38 million equity raising and finalisation of a $57 million debt package. The funds will underpin the development of the Kroondal Platinum project.
Climax has revealed its Didipio copper-gold project in The Philippines has the potential to produce up to 245,000 ounces of gold and 33 million pounds of copper / year following completion of a bankable feasibility study. Estimated capital cost is $220 million and requires the mining of 17.2 million tonnes of ore @ 2.37 g/t Au and 0.66%Cu .
Comet advised that it had produced high-quality nickel (from its Ravensthorpe laterite nickel project) assaying 99.94% from the pilot test work at Hazen research's fully-integrated plant in the US.
Energy Developments has purchased the 50% of the Appin colliery methane-to-electricity project near Sydney that it did not already own - from Lend Lease Corp for a total consideration of $52 million.
Federation has purchased 19.5% of Central Bore NL, which in turn holds a 51% interest in the Cuddingwarra gold project and $11 million of investments in other listed companies. Federation says it paid $2.4 million for 6 million shares and an entitlement to 6 million options in Central Bore.
Normandy expects its 1997/98 net profit result to be similar to the previous year, despite significantly lower base metals prices.
Preston has awarded Multiplex a $543 million contract for the construction and commissioning of its Marlborough nickel project in Qld.
For a preliminary map of the Murray Basin tenement holders, click here.
Net operating profit after tax before abnormal items for the half year to 30 June 1998 was $20.0 million or 8.0 cents per share on issue at 30 June 1998. Net profit after abnormals and tax was $19.3 million (down 3.9%) equivalent to 7.7 cents per share on issue at 30 June 1998.
Gold revenue from operations during the period was $140.7 million. Cost of sales charged to profit in the period was $99.5 million or $381 per ounce of gold sold for the period. Depreciation, amortisation and environmental provisions included in cost of sales were $26.9 million. Income tax expense for the period before abnormals was $12.4 million.
Abnormal profit after tax for the first half year is $0.7 million, reflecting costs associated with a major business systems implementation project which includes initiatives designed to assure the Year 2000 compliance of the Company's business computing systems.
Net cash flow from gold operations for the period was $81.7 million. Net cash flow from all operating activities (before tax) was $72.3 million for the period.
Exploration and evaluation expenditure totalled $16.9 million, of which $3.9 was expensed during the period. Capital and mine development expenditure for the period totalled $20.2 million.
Drawdowns against the A$225 million syndicated unsecured borrowing facility established in 1997 were $40 million as at 30 June 1998. This borrowing position is offset by $21.5 million of cash holdings and $6.7 million in bullion awaiting delivery, leaving Acacia's net debt position at 30 June 1998 at $11.8 million.
The Directors of the Company have decided that no interim dividend be declared during the half year ended 30 June 1998.
Gold production from gold mines at Sunrise Dam (Acacia 100%), Pine Creek (100%), Boddington (331/3%) and Tanami (40%) totalled 263,392 ounces at an average cash operating cost of $256 an ounce.
Proceeds from the sale of 260,809 ounces of gold were $140.7 million, at an average net realised price of $539 an ounce reflecting a premium of $79 an ounce on the average spot price for the period.
The ACCC has granted interim authorisation for the proposed $2.5 billion PNG gas pipeline project.
Glencore and Century Aluminium have offered the Vic Govt $485 million for its 25% stake in the Portland aluminium smelter, well above the estimated range of between $400 - 450 million and the $350 millionprice tag placed on it by Eastern Aluminium.
Heathgate Resources has revealed a minor spill of uranium-contaminated solution at its Beverley uranium mine in SA. The leak occurred when a pipe carrying sulphuric acid uranium solution from extraction wells to the processing plant ruptured. The 21,000 tonne Beverley deposit is expected to produce up to 1,000 tonnes of uranium/year for up to 20 years.
This is the first Quarterly Report by the Company which incorporates the results from the Gold and Minerals Divisions following the consolidation of the assets of the Company with those of Gwalia Consolidated Ltd. The consolidation and re-construction of the two companies took a considerable period of time but the merged Company is now focussed and prepared to improve the performance and value of its existing assets and to look for new opportunities for future growth.
GOLD DIVISION
The Companys attributable gold production for the year ended 30 June 1998 was a record 517,978 fine ounces. Attributable gold production for the quarter ended 30 June 1998 was 135,557 fine ounces. The cash costs per ounce for the year were $372.65 and fell substantially in the June quarter to $350.43, a reduction of $22 or 6 per cent per ounce on the annual figure. For the full year, the average realised price for gold produced was $666.40 per ounce which resulted in a cash margin of $293.75 per ounce.
Based on the above production and cost performance, the Company expects that it will achieve its previously announced forecast net profit after tax, but before abnormals, of between $45 - $50 million.
MINERALS DIVISION
The Companys tantalite business continued to improve. A record 865,000 lbs of tantalite were sold during the 1997/1998 financial year along with substantial quantities of lithium, tin and silica sand.
Tantalum production levels will be maintained and lithium and silica sand production levels increased in the coming year.
In the September quarter the $14 million upgrade of the Wodgina Tantalum Mine will commence.
1998/99 BUDGET AND BUSINESS PLAN
The Company is forecasting steady production from both its Gold and Minerals Divisions in the 1998/1999 financial year. The Nevoria gold milling facilities near the Yilgarn Star Mine will close and the Laverton Mine will be placed on care and maintenance. This re-structuring of our Gold Division will be offset by increased production at the Sons of Gwalia and Marvel Loch Mines which will reduce the Company=s overall cash costs on a per ounce basis to approximately $345 per ounce.
DEVELOPMENT PROJECTS
Work carried out has indicated significant potential for mining below the current underground mine plan depth of 700 metres at the Sons of Gwalia Mine. The old underground mine was mined to a depth of some 1,000 metres and previous drilling by the Company between March 1986 and May 1989 provided encouragement below those depths. A preliminary study which looked at accessing ore below this level was positive and is to be pursued with a deep drilling programme.
Similarly, the Company has had encouraging results from the first stage of the underground drilling programme at the Marvel Loch Mine. Drilling to test the Yilgarn Star Mine at depth is also due to start in the September quarter with first results due in December.
Each of these mines has in excess of one million ounces of gold in reserves and resources with substantial potential for increases at depth.
FORWARD SALES
The Company will continue its long standing policy of hedging its gold production. The Company now has one of the largest gold hedging portfolios in Australia with approximately 4.5 million ounces hedged. The Company anticipates delivering its gold over the next five years, at current production levels, at approximately $640 - $650 per ounce with substantial additional forward cover available for future production at the end of that period.
The mark to market value of the Companys hedge book has fluctuated substantially over the last year caused, primarily, by the large fall in the Australian dollar as against the US dollar. It is important that shareholders understand the objective of this long standing policy which is to protect and underwrite our long term cash flows and revenue streams. The mark to market value of the hedge book does not affect the future delivery price of the Companys gold production. The emphasis is, therefore, on the certainty of the realised price for future gold production rather than the mark to market value which is subject to the volatilities of the US dollar gold price and the Australian dollar / US dollar rate of exchange.
EXPLORATION
The Companys exploration budget for the coming year has been re-focussed with a greater emphasis on near minesite and resource drilling as against "grass roots" exploration. Approximately $10 million will be expended on resource drilling, mainly at the Sons of Gwalia, Marvel Loch and Yilgarn Star Mines with a further $15 million being spent on exploration generally.
During the quarter a new zone of mineralisation was discovered at the Axehandle prospect, 12 kilometres southeast of Southern Cross.
Gold mineralisation was also intersected down dip from the Tower Hill Mine at Leonora in wide-spaced drilling.
The excellent operational results during the quarter, a strong earnings performance for the year, exploration success and expansion prospects for the Companys key gold mines augurs well for the coming year.
During the quarter ended 30th June 1998, Icon continued with its drilling programme and completed the following wells.
Commenced drilling on April 17th and reached a depth of 2,412 metres. The well was abandoned after electric log results indicated good shows in the Cooladdi Dolomite were not commercially viable.
Commenced drilling on 15th May,1998 and reached a depth of 1,925 metres.
The well was abandoned after the electric logs indicated the zones which had shows of oil had poor reservoir characteristics. The Evergreen sands were well developed but were interpreted to be water wet on the logs.
Commenced drilling on 28th May 1998 and reached a depth of 1,947 metres.
The well was abandoned after a Drill Stem Test recovered water.
Commenced drilling on the 14th June, 1998 and reached a depth1,899 metres.
The well was abandoned as the Showgrounds Sandstone was poorly developed and proved to be tight.
Icon Oil NL has now earned interests in all areas except for a small residual earning phase in ATP620P which will be satisfied by the farmin well in late 1998. Icon areas now cover 4,000,000 acres in 13 permits in Queensland. Most wells drilled in the future by Icon will be farmed out in order to conserve funds. The drilling rig will be retained under a lease extension option subject to confirmation of a firm drilling programme and farmout negotiations.
Icon is currently negotiating three exploration and production arrangements in the United States of America to secure a cash flow. With the current oil price weakness Icon is in a strong cash position to acquire profitable production opportunities at a better than average price.
Century Rig #3 under lease to Icon has been contracted to a third party for two months. Following this programme the rig will return to the Surat Basin for a drilling programme of 4/5 wells. Negotiations are advanced with a US joint venture partner to fully fund three of the proposed wells in ATP626P and ATP620P in the Eastern Surat Basins.
Ticor has announced earnings for the 6 months to 30 June of $16.2 million, compared to a $4.4 million loss. Costs have been reduced at the Qld and NSW coal mines and the Tiwest mineral sands project and higher sales and prices were achieved for pigments.
The Directors of WMC Limited announce the following profit attributable to shareholders for the 12 months ended 30 June 1998.
| 12 months to 30 June 1998 $M |
12 months to 30 June 1997 $M |
Change % | |
| Equity profit after tax and abnormals | 233.2 | 297.2 | -21.5 |
| Equity profit after tax but before abnormals | 243.1 | 228.2 | +6.5 |
The profit was affected by the marked deterioration in commodity prices. Although the fall in the value of the Australian dollar in part offset lower US$ metal prices, the Company's currency hedging position reduced this effect. Offsetting this were increased production, lower unit costs and a reduced taxation charge.
The second interim dividend of 7 cents a share fully franked at 36% takes dividends for the 12 months to 12 cents a share (13 cents in 1996-97).
Managing Director Hugh Morgan said that major improvements in management practices, improved productivity and as sociated lower costs, rapid progress on new projects and continuing non-strategic asset sales had positioned WMC to substantially improve shareholder value.
Construction of the Olympic Dam Expansion Project is 82% complete and the copper smelter is scheduled to start production well ahead of schedule in the last quarter of this year. This project will more than double annual output of refined copper to over 200,000 tonnes and uranium oxide to 4,600 tonnes.
The Queensland Fertilizer Project is on schedule to start production in the last quarter of 1999. The project will produce one million tonnes a year of ammonium phosphate fertilizer and will be the world's lowest cost producer. Sales of its total output have been confirmed.
During the year WMC restructured management practices to reduce costs and improve business effectiveness. The Company introduced the SAP business information system; reduced its corporate office; developed financial and human resources shared services departments; continued with the supply and maintenance improvement programs; refocussed exploration activities; and improved work-force arrangements.
Nickel unit costs were reduced by 16%, making WMC one of the lowest cost producers. Gold unit costs were also reduced by 16%, with the Company amongst the lowest cost Australian producers. Copper unit costs rose due to tie ins with existing operations and associated production disruptions. However, they will fall significantly with the completion of the current Olympic Dam expansion.
"Within 18 months we will have a portfolio of businesses all at the low end of the cost curve, three of which will be industry leaders," said Mr Morgan.
Substantially lower prices for slab steel (down from US$250/tonne last year to US$180/tonne) and concern about the commitment of the Taiwanese Government are threatening the $1.4 billion Kingstream steel project in WA.
Operations
Exploration
The Beaconsfield Mine Joint Venturers and Bateman Kinhill, a leading engineering and project management group, today signed the contract for the design and construction of the 200,000 tpa treatment plant.
The lump sum price for the fully integrated treatment plant and mine backfill plant is $19.5 million with provision for additional work including commissioning and training of $1.3 million. The Joint Venture will consider an option for the engineering group to supply and warrant a reconditioned ball mill which would reduce the lump sum price accordingly.
The lump sum price of $19.5 million, including a new ball mill, compares favourably with the feasibility estimate for the equivalent 200,000 tonnes per year plant, including a second hand ball mill, of $19.9 million. In addition, the plant proposed by the engineering group has certain operating advantages, will have lower working capital requirements and will result in slightly lower operating costs.
Chevron's $3.6 billion gas pipeline project had been exempted from the Native Title Act's right to negotiate process under a Labor Party Senate amendment to the legislation. Yesterday a memorandum of understanding between the Qld and PNG governments was signed.
Drilling at the Magnum prospect in WA has revealed significant copper and gold mineralisation; an additional 5-hole drilling program is being undertaken to determine whether there is a substantial resource at the site.
QBE Insurance Group, EA's largest shareholder, has sought a general meeting to remove the managing-director and chairman after a dispute over the Victorian Government's 25% stake in the Portland aluminium smelter (EA is prepared to pay more for the stake than QBE thinks appropriate).
Ergon Energy has secured a multi-million dollar, long-term contract to supply electricity to Incitec's Gibson Island chemical/fertiliser plant in Brisbane.
GCM is studying options to boost output from the Jundee-Nimary gold mine in WA to more than 500,000 ounces/year within 4 years. The 2 options are to either expand through a multitude of underground mines or developing a large super pit operation.
Group Consolidated Pre-Tax Profit
Forward Gold Contracts
Exploration
Shares in Niugini increased almost 7% yesterday following a market re-evaluation of the company's strategic stake in Lihir.
Normandy and Homestake are examining a proposal that could transform Kalgoorlie's Superpit gold mine into an operation producing in excess of 1 million ounces/year (currently about 800,000 oz/yr).
Resolute Limited has successfully acquired all of WMC's gold interests in West Africa. Tenure comprises four permits in total. Two permits in SW Burkina Faso aggregating 510 sq km and two EP's in NE Cote d'Ivoire aggregating 1957 sq km. The four tenements straddle the Burkina-Ivorian border and encompass a highly prospective belt of Birimian greenstones within which WMC have to date outlined several excellent gold prospects by soil geochemistry and limited RAB drilling.
At Nogbale in Burkina Faso, extensive soil anomalies peak at 5.5g/t gold while elsewhere in that tenure numerous other strong geochemical gold anomalies await infill and trenching before RC drilling by Resolute. At Nongon in Cote d'Ivoire reconnaissance geochemistry has outlined extensive gold anomalies peaking at over 2 g/t in sheared magnetic mafic rocks. Again, trenching followed by RC drilling will be carried out by Resolute.
Under the terms of the agreement, Resolute will pay WMC approximately A$0.5 million to acquire their plant and equipment, technical information and tenure. Resolute will at least match WMC's historic expenditure (A$1.8 million) over the next 2-3 years and give WMC the right to take back a contributing interest of 25% once 750,000 in ground resource ounces have been identified and an additional 5% contributing interest should 2.5 million ounces be identified. Resolute will commence a major exploration programme on this tenure shortly.
The WMC package together with Resolute's recently announced strategic alliance covering all of BHP World Minerals' gold projects in West Africa, provide a very extensive, yet cost effective entry into one of the worlds most prospective gold provinces.
Victoria Petroleum N.L. and Sun Resources N.L., both Australia based companies, are seeking industry partners to participate by farmin with Victoria and Sun in the drilling of the highly prospective Gouaro Anticline in late 1998, onshore New Caledonia. The petroleum permit, PRA 436 is situated on the western coast of New Caledonia approximately 160 kilometres northwest of Noumea and covers an area of 591 square kilometres (146,000 acres).
WMC Fertilizers Ltd has announced the signing of a Marketing Agreement with the Fertilizer Division of Cargill Inc covering the export of up to 500,000 tonnes per year of ammonium phosphate fertilizer for five years. Current export prices are US$209 per tonne.
WMC is constructing a $700 million ammonium phosphate fertilizer plant at Phosphate Hill, in North West Queensland, which will produce one million tonnes per year of ammonium phosphate fertilizer. This project, which is on schedule to begin production in the fourth quarter of 1999, will largely replace imports to supply Australian farmers and will create a new export industry.
Corporate
Australian Focus
Nickel Projects - Syerston, NSW
Uranium Projects
AFMEX JV, West Arnhem Land, NT
Frome Projects, SA
Gold and Base Metal Projects
Musgrave Range, SA
Corporate
Corporate
Castle Hill
Tuckabianna
Continued low-cost gold production
Record annual production of 350,000 ounces
Kanowna Belle shines
Granny Smith reserve increase
Gold discovery at Granny Smith
Mining starts at Golden Feather
Zimplats progress
First mining and resources at Kwe Kwe
US generator Entergy Corp is to sell its domestic Citipower subsidiary.
IMR is to fast-track development of a Qld nickel project (Norminco laterite project near Greenvale) after acquiring an option to buy up to 50% of unlisted nickel company Metallica Minerals NL. IMR says the option allows it to subscribe for up to $4 million of new shares in Metallica over 18 months, equating to 50% of the expanded capital.
Newcrest released the first official costings on its Gosowong gold project in Indonesia, confirming the mine would be a low-cost producer. The mine would produce an average 165,000 ounces/year at a cash cost of $US97/ounce.Average head grade is 26 g/t Au. First year production will be 200,000 ounces.
Vengold Inc has purchased Orogen's 6.5% stake in Lihir Gold for $145.7 million. Vengold now has a 19% stake in Lihir and appears in the box seat to make an even larger move on Lihir's share registry. Vengold offered $2.38/share, a 25% premium to yesterday's closing price.
PIG is to raise $400,000 for its Fifian gold operation through a share placement and convertible notes issue to Burdekin Resources NL. Burdekin's stake in PIG will increase to 29.5% after the conversion of the notes issue.
Resolute has denied speculation that it has just completed due diligence on Ghana Gold Mines.
Hodgkinson Province
Yarrol Gold Project
Victorian gold explorers Ballarat Goldfields N.L. (BGF) and Highlake Resources N.L. (HLR) have announced plans to merge under a proposal which would bring together complementary assets and management skills to create a company with an enhanced exploration profile and a dominant regional position in Central Victoria.
The new entity - to be called, for the moment, New Ballarat N.L. - will be well placed to achieve a market re-rating by combining Ballarat Goldfield's advanced Ballarat underground exploration project, cash and mine development skills with Highlake's exciting and diverse portfolio of surface exploration projects, skilled technical team and proven exploration expertise.
The merged group will offer investors an exploration exposure which encompasses such notable Victorian goldfields as Ballarat, Berringa, Maryborough, Dunolly, Goldsborough and Moliagul. New Ballarat will include projects ranging from grass-roots prospects to those with near-term production potential. It will control a total tenement area of about 1,725 square kilometres.
CNG has posted a net profit of $9.1 million for the year to 30 June, significantly above the $1 million in the previous year. The increase is mainly due to a lower unit cost of sales and higher hedging profits. A 3¢, part-franked, dividend will be paid.
Centaur will start nickel/cobalt production at its Cawse project in October but is already talking about an expansion program to build up to a $100 million cobalt refinery on site. Cawse has been built to produce an annual 8,500 tonnes of nickel metal and 1,000 tonnes of cobalt, in a 40% sulphide concentrate.
CTGM has recorded a June-year earnings of $6.6 million, including an extraordinary profit from its commercial settlement with former lender Suncorp-Metway.
During the reporting period, 113 RAB/aircore drill holes (totalling 5,130 metres) were completed at the Mars, St. Andrews, Isolation and Allan Water prospects and regional and infill gold-in-calcrete sampling was conducted at the Ingomar North (274 samples), Ingomar South (187 samples) and Nelson Bore (291 samples) prospects. Detailed ground magnetic surveys were completed at the Mars, Comet, St. Andrews, Neverfail and Birthday gold prospects and in the vicinity of the Sequoia iron ore prospect.
RAB/aircore drilling at the Mars prospect (45 holes) commenced during the quarter, testing zones of anomalous gold and arsenic, as detailed by previous calcrete sampling. Geochemical distributions within the drill pattern demonstrate cohesive elevated gold values at or near basement (up to a maximum of 4 metres at 0.1 ppm gold) and provide discrete targets for the follow up RC drilling programme.
Completed RAB/aircore drilling at the St. Andrews prospect (30 holes) returned elevated bottom-of-hole geochemistry including nickel values of up to 1,400 ppm Ni and copper values of up to 185 ppm Cu. However, there were no significant gold values. Additional detailed calcrete sampling is planned to further investigate the local gold and basemetal distributions.
RC drilling, which has been scheduled to commence at the end of July 1998, will test RAB/aircore generated gold anomalies at the Mars, St. Andrews, Comet, Eaglehawk and Neverfail prospects.
In view of the potential for mineral sands development within the Murray Basin sediments which form part of EL's 4168 and 4170, the historic databases covering previous exploration for mineral sands within those areas are currently being re-evaluated. A test drilling programme to prove up these results is also being designed.
The joint venture arrangement between Gawler Gold and BHM (USA) Ltd. has been reformulated during the quarter under review to provide Gawler Gold with a 99 percent equity interest in a company named Sonoran Gold Pty. Ltd. (with SMV, Inc. holding the remaining 1 percent equity interest). In turn, Sonoran Gold Pty. Ltd. holds a 100 percent equity interest in the Mexican-incorporated company, Mexex Gold Corporation S.A. de C.V. ("Mexex").
Gold-in-calcrete sampling is ideally suited to the alluvial terrain of the region and it is hoped that the implementation of the technique may lead to the discovery of significant obscured primary gold mineralisation. Gawler Gold is currently in the process of testing the exploration model.
Exploration at the Wirrida Project, which recommenced during March 1998, is continuing. Detailed truck mounted platinum-in-calcrete sampling has been completed over target areas Foci 1, 2 and 4 to 11 inclusive, for an aggregate 1,572 samples.
Analytical results from Foci 4, 10 and 11 returned elevated gold and base metal values and RAB/aircore drilling of refined targets is currently in progress. Analyses of samples taken from Foci 1, 2 and 8 were of low orders and the locations have since been eliminated as potential RC drill targets. The detailed platinum-in-calcrete sampling at Foci 5, 6 and 7 remains to be evaluated.
RAB/aircore drilling from Focus 4 commenced during June and is continuing. At the end of the reporting period, 132 holes aggregating 4,070 metres had been completed and another 36 holes, estimated to total approximately 1,200 metres, are proposed to be completed during July 1998, after which the drill rig will move to Foci 10 and 11.
RAB/aircore drilling is currently in progress and preliminary geological interpretation suggests that elevated platinum values of up to 60 ppb Pt are associated with a mafic/gneiss contact zone. Although interpretations and analytical results are incomplete, the zone presents as a target zone for primary mineralisation within the RC drilling programme scheduled for the quarter ending September 30, 1998.
During the quarter under review, Gawler Gold increased its shareholding in ASX-listed mineral sands explorer, BeMaX Resources NL ("BeMaX" - ASX code: BMX) by accepting a placement of shares and options in the company and by further purchases of shares.
As part of the placement, Gawler Gold acquired a total of 1,090,000 fully paid ordinary shares at a cost of 17 cents per share, together with one free attaching option for each share acquired, which entitles the holder to acquire one further share in BeMaX at a price of 20 cents at any time up to, and including, June 30, 2000. The total cost of the acquired shares was $185,300.
On July 22, 1998, Gawler Gold acquired a further 297,374 shares in BeMaX via purchases "on market" and, as at the date of this Report, Gawler Gold holds a total of 3,037,374 fully paid ordinary shares in BeMaX which represents approximately 9.7 percent of the Company's total issued capital at that time.
PEP 135 – Onshore, Victoria
During the quarter ended June 30, 1998, a review of the core, well log and test data from the Petro Tech-1 and Hunters Lane-1 wells was undertaken in Denver, Colorado by a log analyst specialising in greensand lithologies. This study suggests that the gravels underlying the Lakes Entrance Greensand Member may contain significant quantities of oil. As a result of this work, Lakes Oil N.L. intends returning to the Hunters Lane-1 well location in order to drill out the cement plug which currently seals off this unit, and recover fluid samples from the interval thus opened up.
The recent re-interpretation of seismic lines acquired in 1981 in the extreme west of the permit has led to the identification of a structural stratigraphic trap which the Company has named the "Baudin Prospect". The trap results from the pinchout of Lower Latrobe Formation sediments over a south plunging structural nose, located approximately 3.5 kilometres north east of the township of Metung. A well drilled to a depth of 420 metres would test this play. Significantly, a cable tool bore drilled down-dip from the proposed Baudin-1 well location during 1939-40 recorded oil and gas shows in the target interval. The structure is estimated to have the potential to host around 300,000 to 400,000 barrels of recoverable oil, should oil be present. Lakes Oil N.L. is actively seeking joint venture partners to participate in the drilling of the Baudin-1 well.
PEP 136 – Onshore, Victoria
The final interpreted data from the East Gippsland Aeromagnetic and Scintillometer Survey was received during the quarter under review. The aeromagnetic interpretation of the data has been integrated with seismic coverage in order to gain a fuller understanding of the structuring in this onshore portion of the Gippsland Basin and its implications for the migration and entrapment of hydrocarbons.
Re-interpretation of extensive seismic coverage in the eastern portion of the permit has identified a second pinchout play (named the "Investigator Prospect"), where the Lower Latrobe Formation sediments are faulted out against a basement high which was active during the time of deposition. The play relies on intra-Latrobe seals, and the trap could hold in excess of 4 million barrels of recoverable oil, should oil be present. Lakes Oil N.L. is actively seeking joint venture partners to participate in the drilling of the Investigator-1 well.
PEL 39 – Onshore, South Australia
(Lakes Oil N.L.: 10 percent; Operator: Cultus Petroleum (Australia) N.L.)
The East Avenue-1 well was drilled to a depth of 2,900 metres in late March and early April. The well came in close to prognosis, but failed to encounter any significant hydrocarbons in the target sands of the Pretty Hill Formation. In view of this most disappointing result, Lakes Oil N.L. is awaiting a review of the remaining permit prospectivity, as well as the results of the well, from the Operator. A Joint Venture Meeting is scheduled to be held during mid August to discuss the results of this review.
PEL 62 - Onshore, South Australia
(Lakes Oil N.L., Operator: 50 percent)
The results of the Killanoola-1 well, which was drilled by Oil Company of Australia in the PEL 27 permit located immediately south of PEL 62, has significant implications for the prospectivity of the eastern portion of PEL 62. Killanoola-1 and a follow up sidetrack well each recovered approximately 12 barrels of oil from the Sawpit sandstone, located near the base of the Pretty Hill Formation.
The results from this well demonstrate the migration of oil over a distance in excess of 40 kilometres from the Penola Trough depocentre, the source of hydrocarbon generation in the region. Additionally, the Killanoola structure extends into PEL 62, with approximately 20 percent of the feature being located within the permit.
The Porthos structure, an elongated, faulted anticlinal structure similar to the Killanoola feature and located immediately to its north, is located predominantly within PEL 62, but extends southeastwards into PEL 27. Re-mapping of the eastern area of the permit is currently under way. At least two additional leads are also indicated.
The pinch out of Pretty Hill Formation sands on the northern edge of the basin would also appear to be upgraded, especially if the Porthos structure is found to contain hydrocarbons.
PPL 106 - Onshore, Papua New Guinea
(Lakes Oil N.L.: 5 percent; Operator: Barracuda Pty. Ltd. (Santos))
Site investigations are proceeding for the Tumuli-1 well. The 1,800 metre deep well is scheduled for drilling during November. A target of up to several hundred million barrels of recoverable oil is prognosticated in a 200 metre thick Toro Sandstone reservoir below a depth of 1,300 metres.
Normandy is examining a $2.3 billion rationalisation of its international gold operations and Australian base metals arm.
The La Source international gold arm would be broken up between the JV partners or Normandy would buy out the 35% it does not own.
The base metals projects, including the Scuddles zinc mine in WA, would most likely be joint ventured out.
WM has secured 85.7% of Aberfoyle
Record half year production of 263,392 ounces at a cash cost of $256 an ounce and encouraging exploration results at all operations.
Gold Production and Costs
Gold Sales and Hedging
Reserves and Resources
Exploration
Development
AR has announced a $11.2 million rights issue aimed to expand the life of its mines at Mt McClure in WA and Selwyn in Qld. At Mt McClure the focus is on proving up an ore body named Cockburn Deeps where an inferred resource of 2.5 million tonnes @ 8.25 g/t Au (650,000 oz Au) has been identified. At Selwyn, $4.4 million is to be spent on proving up reserves in 2 targets - Plume and Mt Elliott Deeps, and advancing a solvent extraction-electrowinning project to produce copper cathode on site.
Centennial Coal increased raw coal production in the June quarter by 28% and 26% for the 12 months to 30 June.
Eastern Gold has entered into a heads of agreement with Philippine Gold to farm into the Zambales laterite nickel project north of Manila. EG could earn a 49% stake by taking it to a bankable feasibility study stage within 3 years.
Emperor has announced a $17.8 million abnormal loss for the year to 30 June after writing down the value of assets. Emperor had reported a $655,000 operating profit and was now in a "much stronger financial position to continue rejuvenation plans".
The US Global Environment Fund is examining the feasibility of building a desalination plant at Esperance in WA and a 400km pipeline to Kalgoorlie.
Triako has announced recorg gold production in the June quarter of 9,916 ounces and a mine surplus of $2.47 million from its Mineral Hill mine in NSW. Cash operating costs in the quarter wers $150/ounce, taking the annual average to $226/ounce after copper credits.
Emily Ann Nickel Project Development
Gold Exploration
Corporate
Ashanti Reconnaissance Licence (Ghana)
Mpesetia Concession (Ghana)
Tengrela (Côte d'Ivoire)
Korhogo (Côte d'Ivoire)
RC drilling of the Kayeya prospect on the Ashanti Reconnaissance Licence will continue with the view to upgrading oxide resources on the prospect and further metallurgical test work will be undertaken. The Company has commenced baseline environmental studies and an engineering consultant will be appointed to guide the project into pre-feasibility, possibly within the next 6 to 9 months.
MAIN FEATURES FOR THE FOURTH QUARTER AND 1997/98
Iron Ore
Uranium
Zinc
Copper-Gold
Gold
Sales volumes in the June quarter rose slightly to 10.7 million barrels, however sales revenue fell 7.4% to $180.4 million, mainly due to lower oil prices. First-half profit is expected to be 18% lower than the corresponding period in 1997.
Raeside Gold Project, WA
MALDON
CRESWICK
BUANGOR
Anaconda has commenced commissioning the first stage of its Murrin Murrin nickel mine in WA; the first metal production is scheduled for December.
Shareholders have approved the $18 million sale of the Yakabindie nickel project to North Ltd and will now concentrate on 'the basics' of mining with the aim of owning at least 1 major project within 12 months. Dominion is also likely to divest its 19.5% stake in the nickel and gold group Abednego, worth about $10 million.
Zambezi Joint Venture :
Sweden
South Australia - Gawler and Curnamona Cratons
Queensland - Cloncurry
Financial
Operations and Development
Resources and Reserves
Reconciliation
Exploration
Finance
KEY POINTS :
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MIM has announced a 13% increase in annual copper production to 210,940 tonnes.
Fraser Range Region
Laverton Tectonic Zone
Gindalbie (near Silver Swan)
Rio Tinto's Hammersley Iron has received government approval to extend its Brockman iron ore mine in the Pilbara, WA. Hammersley has decided to replace the contractor workforce with 75 staff operators.
Savage has announced a full-year net profit of $16.4 million, up 37% from $11.9 million; a steady 1¢ unfranked final dividend was declared. The second half was adversely affected by lower zinc prices.
Savage hopes to finalise its bankers and the structure of a funding program by the end of August for its $800 million zinc refinery expansion at Tennessee. The project will see annual output nearly tripled to 300,000 tonnes by 2001.
The Capital Group Companies Inc decreased its relevant interest from 10.29% to 9.21%.
HIGHLIGHTS - FOR THE THREE MONTHS ENDED 30 JUNE 1998 |
AMP Ltd ceased to be a substantial shareholder.
Austral Coal increased its interim net earnings for the 6 months to 30 June; net profit rose 8% to $2.86 million. There is no interim dividend.
Morgan Stanley Asset Management became a substantial shareholder with a relevant interest of 5.08%.
HIGHLIGHTS - JUNE QUARTERLY REPORTBIBLIANDO (Copper, gold)
COMMONWEALTH HILL (Gold)
MURRAY BASIN (Heavy Minerals)
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Overview - June Quarter
Production
Development
Exploration
Financial
Corporate
Operating revenue in the June quarter jumped 21% to $19.18 million; oil production rose from 540,600 barrels to 971,000 barrels and more than offset a near US$7 fall in the oil price.
Total full-year production of both zinc and lead in concentrate fell to 1.22 million tonnes from 1.27 million tonnes in 1996/97.Pasminco expects to make a small profit for the 1997/98 year.
Societe Generale Asset Management decreased its relevant interest from 6.35% to 5.46%.
Uranium Australia called a trading halt on its shares yesterday to compile a study on its Syerston nickel/cobalt/scandium deposit in NSW.
NM Rothschild & Sons (Australia) Pty Ltd increased its relevant interest from 7.82% to 9.93%.
Hostyle Pty Ltd increased its relevant interest from 6.21% to 9.87%.
CAIL has reported a $34.1 million net profit for the half year, compared to a $8.8 million loss in the previous corresponding period. This was mainly due to a weaker dollar, management restructuring and emerging workplace reforms at its 2 coal mines in NSW. A 40¢ interim dividend (part-franked) was declared.
NM Rothschild & Sons (Australia) Pty Ltd ceased to be a substantial shareholder.
Scientific Services increased its relevant interest from 73.17% to 78.94%.
Gold production fell 12% in the year to 30 June to 191,250 ounces, due mainly to lower grades and recovery.
Meekatharra has assured the market that its $800 million pig iron smelter and power station project in South Australia will go ahead with the support of Indonesia's Krakatua Steel.
Petroz advises that the Melanie-1 well, located in EP-359-P in the Carnarvon Basin in WA has reached a total depth of 1422 mKB and has been plugged and suspended as a potential water well.
Midbank Pty Ltd became a substantial shareholder with a relevant interest of 8.67%.
WM has now acquired 54.6% of Aberfoyle.
Aurora is the likely buyer of Australian Gold Fields NL's (administrators appointed) Morobe gold-silver project in PNG. Morobe has inferrd resources of up to 5 million ounces of gold and 60 million ounces of silver.
Annual gold production in 1997/98 jumped 54% to 349,728 ounces and cash costs fell from $276/ounce to $174/ounce.
Reserves at the Granny Smith mine were increased and Delta also reported a gold discovery at the nearby Wallaby prospect in WA.
The transfer of all Delta's platinum interests is expected to be completed in November, with a new company, Zimplats Platinum Mines, to be listed on the ASX in December. Zimplats only operating asset will be a 33% interest in the Hartley Platinum mine in Zimbabwe but will work on developing the 100%-owned Ngezi platinum project, located close to Hartley.
Homestake reported a US$37.5 million loss in the 6 months to 30 June, of which about half was incurred in expenses related to the takeover of Plutonic.
Homestake produced 656,000 ounces of gold in the June quarter; output at Plutonic fell from 73,900 ounces to 55,700 ounces as the mine ceased all open-pit operations and converted to underground mining.
Summary - June Quarterly Report
PMA advises that the Bankable Feasibility Study ("BFS") for the Windimurra Vanadium Project has been completed and delivered to Glencore International AG, for evaluation and comment.
Glencore will be undertaking an intensive evaluation and review of the BFS, following which the Company will be in a position to release full details of the study's findings to the market.
The objectives of the BFS were twofold. Firstly, to undertake confirmatory test work in a number of areas (including resource definition) to increase the certainty of the findings of the study completed by PMA in October 1997. Secondly, to optimise the various process activities and to confirm and update operating and capital costs for the project.
The Company advises the BFS has met these objectives including delivering a significant increase in measured reserves (refer announcement 3 June 1998) and providing confirmation of the Company's previous test work on the project.
RGC has dropped plans to purchase the Cerro Corona copper-gold project in Peru and, in accordance with its plans to merge with Westralian Sands and concentrate on mineral sands, base metal activities in Australia have been reduced to the Reward mine area in Qld.
Rio Tinto has reported improved production across most of its primary commodities for the first half of 1998; iron ore output was the only exception. Lower commodity prices have been partially offset by a lower Australian dollar.
AMX has commenced mine planning for its 824,000 ounce Golden Cities gold project near Kalgoorlie in WA.
AMX has also made another discovery at its London prospect (5km south of the main Havana Suva orebody) where drilling had resulted in intersections including 9m @ 3 g/t Au.
Austpac has signed the first licence for the commercial application of its titanium minerals upgrading technology with South African steel producer Iscor.
Bhp and Shell Canada's Athabasca oil sands JV has reached agreement with Vancouver's BC Gas to develop a C$440 million corridor pipeline connecting the Lease 13 mine with Shell's Scotford upgrader. A C$100 million feasibility study is now under way on each component of the C$3.4 billion Athabasca development and is expected to be completed early next year.
Drillsearch has commenced oil production in Albania and would move to 95% ownership of the project by acquiring 47.5% stakeholder Kiwi International Resources. Combined production from the Ballsh-Hekal and cakran-Mollaj fields was 1580 barrels per day, with 1280 barrels being controlled by the Albanian State oil company. Drillsearch says production should increase to 2500barrels/day within 4 months.
Mt Conqueror has announced increased resources at its Morning Star gold mine in Victoria; identified resources are 1.58 million tonnes @ 5.5 g/t Au (278,000 ounces) for underground extraction plus 464,000 tonnes @ 2.6 g/t suitable for open-pit mining. A new steel shaft has reached a depth of 130m and the company expects to find additional resources in the deeper workings.
Pacific Mining has announced record gold production in the June quarter. Total gold production from its Tarmoola and Mt Gibson operations was 47,515 ounces; cash operating costs had been reduced from $391/ounce in the March quarter to $365/ounce.
Pima plans to raise $1.5 million via a non-renounceable share issue at 6¢/share, to enable the company to drill its Gawler Craton (Sandstone area - Endor, Matador and Yalvin prospects)) and Adelaide Hills prospects (Reservoir and Wheal Ellen) rather than farming them out.
The JV partners have decided to develop the Mt Olympus gold project in WA; the first gold pour is expected in January 1999. A feasibility study showed gold could be produced at the rate of 60,000 ounces per year at a cash operating cost of $250/oz.
Unexpectedly high scandium values recorded from drill intersections at the Syerston nickel-cobalt project in NSW sent UA's share soaring late last week. Results from the 10 widely-spaced holes included 22m @ 135.8 g/t scandium, 37m @ 147.1 g/t (including 14m @ 370.9) and several other intersections grading between 12-68 g/t. UA's next step is the pre-feasibility study for the nickel-cobalt operation.
Aberfoyle capitulated to WM's $3/share takeover bid, recommending short-term shareholders accept the offer. At the close of trading, WM had about 45% of Aberfoyle.
Overview - June Quarterly Report
Record half year production of 263,392 ounces at a cash cost of $256 an ounce and encouraging exploration results at all operations.
Gold Production and Costs
Gold Sales and Hedging
Reserves and Resources
Exploration
Development
BP announced a $500 million investment package that includes expansion and upgrading of its Brisbane refinery, a $170 million BOC Gases facillity and an $80 million co-generation power plant.
First-half profit was $6.61 million and the company forecast gold output for the full year would not meet previous expectations; it would be about 600,000 ounces compared to an expected 625,000 ounces.
MIM will sell its road transport operations to Toll Holdings and enter into new freight forwarding arrangements with Toll.
RGC and WS plan to merge. Under the scheme, each RGC share would be converted into 0.65562 Westralian shares, which means RGC shareholders would emerge with 62% of the new company.
Bankers Trust Australia ceased to be a substantial shareholder.
Ashton has reported an 18% jump in diamond sales (to US$230 million) for the 6 months to 30 June, mainly due to continued strong growth in the US for mass market diamond jewellery.
AGR announces that rock chip samples from the Company's exploration licence application E57/419 over the Youanmi Intrusive Complex 120 kilometres east southeast of Mt Magnet in Western Australia returned an average grade of 0.83% vanadium pentoxide. These results indicate potential for a sizeable economic vanadium deposit.
Australian Mineral Processors announced the third stage of its drilling program at the Tableland gold prospect near Gympie in Qld, had produced excellent results, including 11.46g/t Au from 12m (including 2m @ 45.3 g/t).
Chevron has warned that failure to secure a market for its proposed $3.5 billion PNG pipeline within 8 weeks could affect the project's construction schedule.
Energy Australia reported earnings before interest and tax for the year to 30 June 1997 jumped 77% to $406.9 million and expects earnings in 1998 to grow only 3.2% due to increased competition.
Mosaic has advised that in the tenement adjacent to its PEP-38330 in the East Coast Basin on the east coast of New Zealand, Westech has announced gas has flowed at a rate of 11.5 million cubic feet/day. Mosaic believes reserves could be more than 500 billion cubic feet of gas, 'which would be a world-class discovery'.
Mt. Kersey Mining N.L. has reached an agreement with Kitchener Resources and Topsfield to secure rights (to earn a 76% interest) to explore 10,000 square kilometres of the Fraser Range Region bordering the south east of the Yilgarn Craton in Western Australia. The Fraser Range Region has the potential to host substantial gold, diamond and base metal deposits.
HIGHLIGHTSWestern Australia
Queensland
Corporate
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WM has increased its stake in the Thai zinc smelting group Padaeng Industry Co from 15% to over 45% through a $40 million share placement(81.6 million shares)
Permanent Trustee ceased to be a substantial shareholder.
The Capital Group Co Inc decreased its relevant interest from 12.37% to 9.78%.
Maple-Brown Abbott increased its relevant interest from 6.81% to 7.9%.
AMP decreased its relevant interest from 8.09% to 6.76%.
Mercantile Mutual decreased its relevant interest from 6.26% to 5.1%.
Mercury Asset Management Plc ceased to be a substantial shareholder.
Paladin is likely to make a capital raising soon, possibly in the US, to fund further development of its proposed $50 million Manyingee uranium project.
PDFM & Associates decreased its relevant interest from 12.11% to 11.96%.
Production in the June quarter recovered from last years drought and jumped to 183,262 ounces of gold (up from 151,812oz in the June '97 quarter). Following the drought, the JV partners doubled the water storage at its Waile Creek dam.
Preston has purchased the Bulong nickel-cobalt project for $319 million - a $279 million cash settlement and the transfer to Resolute of a 19.9% stake in Preston. Preston has secured a debt facility with Barclays Capital conditional on a deposit of US$20 million. To meet this Preston will issue 16 million shares @ $2.50 each, fully underwritten.
Redfire is to place 5.84 million fully-paid shares (15% of current issued capital) at an issue price of 5.5¢, together with 5.84 million options at 1¢. Rene Rivkin will take up 3.74 million shares and options and has been invited to join the board; Warren Batt has resigned as director.
County Investment management became a substantial shareholder with a relevant interest of 5.3%.
Aberfoyle's share price closed at $3.01, 1¢ above Western Metals' takeover offer price for the first time in more than 2 months. Aberfoyle's directors have recommended shareholders reject the offer.
Production at its Hellyer zinc mine in Tasmania and its Gunpowder copper mine in Qld fell in the June quarter- Hellyer was down from 358,815 tonnes to 349,815 tonnes and Gunpowder was down from 7832 tonnes to 6423 tonnes.
Exploration expenditure for the quarter totalled $3.5 million.
Tyndall increased its relevant interest from 9.47% to 10.78%.
Scientific Services increased its relevant interest from 57.36% to 58.43%.
Grenfell is to take a 75% stake in Indian company Meridian Minerals India. The principal asset of Meridian Minerals India is 100% ownership of 6 mineral exploration leases in Rajasthan in north west India. The lease areas have been selected by Meridian's Indian geological consultant and are prospective for zinc/lead, copper and gold. Major existing deposits of zinc/lead and copper are mined in this region by the government owned enterprises Hindustan Zinc and Hindustan Copper.
Exploration by both MACMIN and joint venture partners continued at a relatively high level on six projects during the quarter. Several projects yielded encouraging results.
In the near future, drilling is planned at the Texas Project (50% funded by MACMIN), at the Feni Project (funded by J/V partner New Guinea Gold Corporation) and at the 100% owned Crater Mountain Project. In the longer term, drill targets or plans for extensive bulldozer or excavator trenching have been defined for all projects, but implementation awaits a resurgence in metal prices and/or an increased interest in junior exploration stocks by the investing public and/or further farm outs (joint ventures).
MACMIN'S portfolio of exploration projects is considered to rank well above those held by most junior exploration companies. All MACMIN'S projects in Papua New Guinea have exploration results which suggest they could host world class ore deposits and the Australian projects, significant deposits. To date MACMIN has not succeeded in transforming any of these projects from advanced exploration to major development but the continuing accumulation of encouraging results brings the likelihood of such a discovery continually closer. The present market capitalisation of MACMIN does not reflect the advanced nature of most projects, or the discovery potential of the projects. MACMIN has the potential to participate in the discovery of not one, but possibly several, world class deposits within the next few years. Thus, we believe MACMIN is substantially under valued at present, and urge all shareholders and investors to carefully consider MACMIN'S future potential, based on its technical expertise and high quality advanced projects, when next investing in the junior exploration industry.
During the quarter thirteen holes totalling 1364m were drilled at Texas. Six holes, including those designed to test depth extensions of very high grade mineralisation at Twin Hills, had to be abandoned because of difficult drilling conditions caused by extensive cavities within silica alteration. These areas will now need to be tested by diamond core drilling. The high grade intersection quoted above is in a new area at Mt Gunyan.
Significant base metals were intersected near a geophysical anomaly east of Silver Spur at Whites Hill, and suggests this area requires additional drill testing.
The inferred resource at Texas, (possibly amenable to open pit extraction) based on drilling and detailed surface geochemical work completed to date is approximately eight million tonnes at approximately 130g/t Ag and 0.4g/t Au. The in-ground value of this resource is approximately AUD $350 million. There is scope to significantly increase the resource. Further drilling and other studies are required before this resource can be confirmed as economic, and form the basis of a mining operation. However MACMIN regards the results to date as very encouraging and remains convinced that the probability of defining a viable silver mining operation at Texas is excellent.
The geophysical programs at and near the Weioko Prospect (Sehulea Project) and Imwauna Prospect (Normanby Project) have both been successful in that they have defined significant and high value geophysical anomalies adjacent to and parallel to, or along strike from previously drilled gold mineralisation. These geophysical anomalies suggest much larger volumes of mineralisation than has been drilled to date. MACMIN considers the results very encouraging but confirmation of mineralisation requires further drilling, perhaps later in 1998.
A scoping study at Imwauna Prospect, Normanby Project, based on the results from the test pit and bulk sampling of the main high grade Imwauna Vein suggests that a viable small open pit mine could be established there to mine 30,000ozs Au per annum for two years. Diluted head grade would be 10.1g/t Au. The mining operation would be much more attractive if the mine life could be extended to four years or more.
The major exploration emphasis at Normanby will, however, remain on the exploration for a large resource such as occurs at Misima, however, a secondary emphasis will be on the doubling of the present likely high grade reserve of 60,000ozs Au to 120,000ozs Au.
Survey work has recommenced at the Feni Project in preparation for the commencement of the geophysical survey, now expected to commence in early August. This geophysical survey represents the last phase of accumulation of surface data prior to drill testing, scheduled for later in 1998.
At Crater Mountain, meetings with local landowners are scheduled for mid-July to prepare the way for a drilling program later in 1998.
In Tasmania, at Thirkell Hill, two diamond core holes totalling 371m were completed. These holes intersected disseminated mineralisation but not massive sulphides. Assays are not yet available.
Also in Tasmania, excavator trenching of extensive gold and arsenic soil anomalies commenced at the Golconda and Panama North Prospects, Lisle Project.
At the end of the quarter MACMIN had approximately $2.35 million in cash including $0.8 million in advances from New Guinea Gold Corporation for exploration expenditures on the Feni and Normanby Projects. In addition, MACMIN had listed securities with a market value of approximately $800,000 and owns a complete 100,000t/annum gold plant valued (at a cost to MACMIN of $1.7M).
Deutscha Australia became a substantial shareholder with an interest of 5.02%.
MIM has appointed former banker john Astbury as its seventh non-executive director.
New Mineral Sands Opportunities:
Joint venture exploration agreement for mineral sands on two tenements near Swan Hill in north western Victoria.
Secured the right to explore for mineral sands on the 100% owned Chowilla Regional Reserve above Renmark in South Australia.
| Swan Hill | : | RAB drilling to confirm past mineral sands occurrences. |
| : | Wide-spaced drill program along roads to identify other targets. | |
| Chowilla | : | Awaiting Mines Department clearance to commence exploration activity. |
| Dreadnought | : | Continue native title negotiations. |
The 1997-98 year finished with a strong June quarter operational performance from the core gold division and from base metals.
Attributable gold production at 371,650 ounces was a record, driving annual production to 1.43 million ounces, a 6.9 percent increase and also a record. Importantly, the total cash cost was lower again, without compromising reserves, at $311 per ounce.
Year on year, the average total cash cost was down 4.5 percent and, combined with the improved production level and a realised gold price of $612 per ounce (up 1.8 percent), resulted in an improved operating margin of $291 per ounce, up 9.8 percent.
For the June quarter, record gold production was achieved at Pajingo and Mt Leyshon and, for the year, at Mt Leyshon, Tennant Creek, Big Bell Underground, Martha, Ariab and Ity.
Oil production has commenced from the Elang, Kakatua and kakatua North Fields in ZOCA 91-12 of the Timor Sea Zone of Co-Operation. The combined reserves for the fields is estimated to be 29 million barrels of oil which will be produced over a 4 year period.. This will produce a significant cash flow for Petroz and will help fund Petroz's share of the Bayu-Undan Liquids Project due to commence in 1999.
A foreign company reportedly offered Resolute $300 million for its Bulong nickel project in WA, causing the share price to jump 14%. An announcement is expected today.
Bankers Trust increased its relevant interest from 8.13% to 13.02%.
Industrial tension has flared at Arco's Gordonstone underground coal mine in Qld after management placed an advertisement fo 50 new employees to restart the operation - a limited recommencement plan.
Scientific Services increased its relevant interest from 56.11% to 57.36%.
| Gawler Craton | - Evidence of basement mineralisation at Myall Creek |
| Siberia | - Centaur extends its option over Merritt's nickel resource |
| Funds | - $2.1 million cash and investments |
Merritt is conserving funds whilst maintaining active exploration on its best project. Other projects are being rationalised into non-expenditure joint ventures or are being surrendered. This strategy has placed Merritt in a reasonably strong financial position compared to many other junior explorers.
Federal government approval checks for the Murrin Murrin nickel-cobalt project will be fast-tracked to ensure development commences as soon as possible.
Despite testing conditions, Aurora recorded a 12% increase in bullion production over the previous quarter to 68,926 gold equivalent ounces at a cash operating cost of US$172 per gold ounce.
Aurora now appears set to develop the Toka Tindung gold project in North Sulawesi after announcing it met the criteria of viability at present gold prices and it would proceed to prove up 750,000 ounces (currently 660,000).
Optimisation studies on the project determined an optimum throughput rate of 1.2 million tonnes per annum, which would yield 150,000 ounces of gold equivalent a year at a cash cost of less than US$200 per ounce.
A new resource of 402,000 tonnes grading 7.8 g/t gold and 10 g/t silver for 102,000 contained ounces (gold equivalent) has been estimated for the Talawaan prospect - representing one of the highest grade resource estimates ever announced by Aurora at a mineral deposit. Drilling results from the prospect during the quarter included 10.2 metres at 9.29 g/t gold and 10 g/t silver, and 10.5 metres at 11.84 g/t gold and 16 g/t silver.
Cambrian and Troy have become equal JV partners in the Mt Klemptz tenements in the Sandstone region in WA. The JV includes the prospective Bulchina prospect where drilling has outlined a resource totalling 644,700 tonnes @ 3.1 g/t Au (64,900 ounces).
Cultus has announced some encouraging results from the Tenacious discovery in the Timor Sea and is pushing ahead a fast development program for the small oil field.
Desertstone has successfully placed $6 million worth of shares and is planning to drill and develop coal-bed methane gas deposits in the Sydney Basin.
Otter produced 110,506 ounces of gold in 1997/98 at an average cash cost of $323/ounce. Otter is on track to produce 150,000 ounces/year after the expansion of the Martha Hill pit later this year and the first production from the Beaconsfield mine in 1999. Otter is about to build the first underground operation at Tanami by working the Carbine deposit.
A change in government in Senegal has led Paget to reassess its position regarding the disputed Sabodala gold project.
Drilling and bulk sampling at the Lucky mine in Qld has indicated that the resource is about 50% greater than previously thought. The two-thirds of the lease which has been drill-tested has an indicated resource of 290,000 cubic metres, sufficient for 5 years and valued at $8.3 million.
Drilling has also been carried out at Bob's Fault, 10km from the Lucky prospect, and has indicated an inferred resource of 100,000 cubic metres, enough for a 3-year mining operation.
Ranger is installing a 17Mw power plant at its Danang Mine in Ghana at a cost of $7.5 million; this would enable Ranger to be independent of the grid when necessary.
Cash costs in the June quarter decreased to $350.43/ounce and total gold production for 1997/98 rose ta a record 517,978 ounces. Production in 1998/99 is expected to be slightly lower at 490,000 ounces as SOG restructures its operations.
A return to full capacity at Ok Tedi has resulted in a 17% jump in copper concentrate production in June to 58,900 tonnes; however copper anode production fell 9% to 33,300 tonnes (compared to June 1997).
Raw steel production for June totalled 731,000 tonnes, 11% above June 1997.
Production at the Beenup mineral sands project in WA collapsed in June from 21,000 tonnes in May to just 4,000 tonnes, due mainly to problems with the settling of clay tailings in temporary ponds.
Asturiana de Zinc SA withdrew its bid for WM yesterday, following WM acquiring more than 25% of Aberfoyle.
Colby Corp became a substantial shareholder with a relevant interest of 14.3%.
NM Rothschild & Sons (Australia) increased its relevant interest from 10.23% to 17.07%.
ERA announced a fall in uranium oxide production in the June quarter to 732.6 tonnes (1,104.8 tonnes in the June'97 quarter), mainly due to chemical difficulties in the processing plant. However, with the 50% plant capacity expansion in place it is expected that production will increase to 5,000 tonnes in 1998 (4,161.9 tonnes in 1997).
Production in the June quarter was a record 32,558 ounces of gold at a cost of $285/ounce. Annual production totalled 112,349 ounces at a cash cost of $293/ounce. The cash operating surplus for the year was $19.5 million.
Hudson Investment Group increased its relevant interest from 7.90% to 6.45%.
Mercury Asset Management Plc decreased its relevant interest from 73.6% to 81.1%.
QNI announced a 32% increase in nickel production in the June quarter to 15,080 tonnes due to increased output at both the Yabulu nickel refinery inear Townsville and the Cerro Matoso mine and smelter in Colombia.
West Oil has launched a scrip bid of 5 of its own shares for every 9 Frontier shares on issue at the completion of the company's recent rights issue and placement. Frontier is raising $5.17 million through a rights issue to help fund its $10.5 million purchase of Cambridge Petroleum royalties from Sons of Gwalia.
WM is entitled to 33.38% of Aberfoyle.
Western Metals increased its interest from 22.9% to 27.1%.
The expanded Gunpowder copper mine in Qld started the commissioning phase on budget and ahead of schedule. The expanded operation comprises the major open-pit development of the Esperanza orebody; the new processing plant has a capacity of 50,000tpy of LME A-grade copper.
The directors of Allgas Energy have officially recommended shareholders accept the takeover offer by Energex.
Austral Coal has continued to cut staff at its Tahmoor colliery to counteract weaker demand.
NM Rothschild Australia ceased to be a substantial shareholder.
Boral announced that it was examining a $300 million gas development to bring cheap power to Tasmania following encouraging exploration results at its Yolla field, 100km off the coast in Bass Strait. Recent drilling had confirmed reserves of 450 to 600 billion cubic feet of gas, significant quantities of condensate and up to 70 million barrels of oil.
AXA-UAP & National Mutual Holdings decreased its interest from 9.15% to 7.83%.
JP Morgan Investment Management became a substantial shareholder with a relevant interest of 8.75%.
23.47 million shares changed hands yesterday as one of its major shareholders sold out. It is believed the seller was Macro Corp disposing of the balance of its holding after selling its stake down to 12.54% last Friday.
Sonvest Corporation became a substantial shareholder with a relevant interest of 5.04%.
Tyndall increased its relevant interest from 9.41%% to 10.70%
Shell announced that its Basker-Manta exploration play near Lakes Entrance off the Victorian coast was an expected commercial gas and oil field. Exploration suggested the field contained 670 billion cubic feet of gas, 70 million barrels of oil and 37 million barrels of condensate.
WM sold its 8.9% parcel (as per the Federal Court order) in Aberfoyle to institutions but is expected to be the owner of the shares again by today. If it gets back all of the shares it could take its interest in Aberfoyle to over 30%.
FAI Insurance ceased to be a substantial shareholder.
AIC plans to raise $3.5 million via a public float as part of its push to capitalise on a niche market for its activated carbon coal products. The company is issuing 17.5 million 20¢ shares with the money raised to be used to upgrade its production facilities, repay debt and provide working capital.
Samuel Holdings increased its relevant interest from 13.38% to 13.76%
Partners in the Laminaria-Corallina oil field yesterday came to an agreement to overcome an overlapping section of the field that trespassed onto BHP acreage. Under the deal Woodside and Shell decreased their holdings in Laminaria and BHP increased its interest. In return, Woodside and Shell got access to an easterly extension of the field estimated to contain at least 15 million barrels of oil.
Recent studies undertaken by a greensand specialist in Denver USA engaged by Lakes Oil N.L. has indicated potential for production of oil from the sands/gravel underlying the "Greensand proper" at lakes Entrance. Previously it has been thought that these sands/gravels would be an active water aquifer, and they were accordingly cemented off prior to testing in Lakes' recently drilled appraisal wells, Petro Tech No. 1 and Hunters Lane No. 1. This recent log analysis suggests these sands/gravels could produce a mixture of oil and water.
Lakes Oil N.L. considers this recent analysis, incorporated in Energy Data Services Inc.'s Report, to be sufficiently encouraging to push ahead with opening up the basal sand/gravel at Hunters Lane No. 1.
The JV partners in the Porgera gold mine in PNG have increased the indicated reserve and resource estimates by 12% - "The increases have replaced ore that was mined during the year and added a further 400,000 ounces of gold in total," say the joint venturers.
Resolute has received acceptances for about 71% of its $103.4 million rights issue.
Western Pacific Gold launches its comprehensive web site, constructed and hosted by Digital Reflections.
The President of Western Pacific Gold Inc. (WPI), Mr. Nicholas Mather, is pleased to announce that a major international mining company has reviewed the data on WPI's wholly owned subsidiary Magma Mines NL's Papua New Guinea exploration properties, and preliminary discussions are underway on a possible joint venture to explore the Magma tenements.
Speculation that WS will launch a takeover bid for rival sand miner RGC boosted the share price of RGC.
AXA-UAP & National Mutual Holdings decreased its relevant shareholding from 7.52% to 6.39%.
The 100,000 ounce-a-year Beaconsfield gold mine in Tasmania is expected to be operational in August 1999 after the start of mine development. $50 million will be spent over the next year on the mine which will have a head grade of 16 g/t Au and is planned to produce at a cash cost of A$260 an ounce. The tender to construct the treatment plant and bacterial leach plant was expected to be awarded soon.
The Company recently lodged an exploration licence application E57/419 totalling 196 square kilometres over the Youanmi Intrusive Complex which is located 30 kilometres to the southeast of the Precious Metals of Australia Limited and Glencore International AG controlled Windimurra Intrusive Complex. The Youanmi Intrusive Complex is prospective for vanadium, copper, zinc and nickel sulphides and is considered to be stratigraphically equivalent to the Windimurra Intrusive Complex which hosts a substantial vanadium mineral resource.
Field reconnaissance of a recent exploration licence application in the Mt.Thirsty area 15 kilometres north of Norseman has returned assay results of up to 1.9% cobalt and 1.5% nickel from shallow pits. The laterite has a very similar appearance to siliceous cobalt or SiCo ore at Cawse, northwest of Kalgoorlie.
Empire plans to spud its first well in the Perth Basin's Gingin gasfield in August. The 4,100m well, costing about $5 million, will take about 52 days to complete.
The share price continued to ease following news that the Indonesian government-owned PT PLN electricity company had failed to pay its US$1.9 million bill for power supplied through the Sengkang Power Project, paying only US$500,000. EEC made a similar announcement when PLN first defaulted 4 months ago, again paying only US$500,000 of a US$1.9 million bill.
Mining of supergene copper ore at the Mount Windsor JV - Reward Project, has commenced. 450,000 tonnes of ore, grading 10.8% Cu is scheduled to be mined and trucked to RGC's Thalanga plant for processing; mining is expected to be completed by May 1999.
Perpetual Trustees became a substantial shareholder with a relevant interest of 8.06%..
Colonial & Associates became a substantial shareholder with a relevant interest of 5.00%..
Newcrest announced an upgradeed resource estimate for its Cadia Ridgeway Project in NSW. The deposit contains an estimated 44Mt @ 2.6 g/t Au and 0.82% Cu of which 32Mt @ 2.9 g/t Au and 0.87% Cu are classified as Indicated and the remaining 12Mt @ 1.8 g/t Au and 0.69% Cu are Inferred.
The exploration decline is currently 700m long and should allow access to the deposit during the March 1999 quarter.
Normandy NFM's blamed plant trials of Callie underground mine material and dwindling soft easy-to-mill ore for a 22% fall in production in the June quarter to 48,050 ounces of gold. Mine operating costs increased from $214/ounce to $278/ounce.
By selling into high-value hedging positions the cash margin for each ounce of gold sold was 5% higher at $345/ounce but margins are expected to fall if the gold price continues to languish.
Bankers Trust ceased to be a substantial shareholder .
The Directors of Straits Resources Limited (ASX Code: SRL) are pleased to announce that the Company has reached agreement with WMC Resources Ltd to purchase the Nifty Copper Operation. The operation is located in the Great Sandy Desert Region of the East Pilbara in Western Australia, 1,250 kilometres north of Perth.
Following the acquisition of Nifty, Straits' attributable production from its two SX-EW copper mines will be 27,000 tonnes of LME Grade A copper cathode per annum at a cash operating cost of approximately US50 cents per pound.
Nifty will contribute positively to earnings and cashflow. Over the life of mine it is forecast to generate Earnings Before Interest and Tax of an average of A$11 million per annum and Operating Cash Flows of A$17 million per annum.
Straits Resources has agreed to pay WMC Resources Ltd A$32 million on settlement and A$18 million payable in four equal annual instalments of $4.5 million. The acquisition is conditional upon the parties entering into the usual Sale and Purchase documentation, consents of the Ministers for Resources Development and Minerals and Energy for Western Australia and Foreign Investment Review Board approval.
SPRINGFIELD DIAMOND EXPLORATION UNDERWAY. A new phase of diamond exploration commenced in May and the first batch of results are now available. A total of 56 diamonds were recovered from the preliminary bulk samples which totaled 1.63 carats. A further seven small diamonds were recovered from indicator mineral samples. The largest stone was a clear white macle-dodecahedron with a diameter of 3.5 mm and a weight of 0.34 carats. This is the largest known diamond to be recovered from the Central Flinders Ranges to date. Together with the indicator mineral results a suggested location for a larger bulk sample has now been defined.
During June an undercover drilling program commenced to search for the kimberlitic source of the Springfield diamonds. A total of 66 holes for 421 meters at an average length of 6.4 meters were drilled. Samples have been dispatched to Perth for indicator and diamond mineral observation.
WM's has declared its $3-a-share takeover bid for Aberfoyle unconditional.
Highlights - Quarter Ended 30 June 1998
WMC is seeking partners for its large Tampakan copper/gold project in The Philippines. Current resources are 2.5 billion tonnes @ 0.48% Cu and 0.2 g/t Au.
Anglo-American subsidiary Prospecting Ventures is restructuring its Zimbabwe JV with Cambrian and has agreed to spend another US$2 million on gold exploration. Initial exploration was on the Giants mine but Cambrian will now include several other of its tenements as part of a new 50/50 JV. Drilling at the Giants mine has identified a resource totalling 336,000 ounces (average grade 2.1 g/t Au).
China is to end its State monopoly on gold production in an attempt tp boost profits in this sector, according to a China Daily report. Currently China ranks 5th in the world in gold production (166.3 tonnes in 1997).
At the present time all gold has to be purchased by the State - currently at a price that is higher than the world market.
Co-operation with foreign gold mining companies will be encouraged.
Finders Gold has been issued an EL (Block D-7 concession) in the Indian State of Madhya Pradesh where previous exploration has identified 40 kimberlitic anomalies.
IMR has entered a JV with Resource Exploration to look for platinum at Mt. Singleton, in the southern Murchison region of WA.
IMR is also looking to restart work on its Badgebup gold mine, north-east of katanning in WA, which it operated until it was put into administration last year after running out of money. It has been rescued by a private Perth-based investment group, Commercial & General Capital and is now being run by executive director Tony Grist.
Drilling has commenced at the Eteke concession in Gabon where indicated and inferred resources now stand at 1.87Mt @ 6.4 g/t Au.
Metex has doubled the size of its Chatterbox tenements in the Laverton region of WA. Metex and JV partner Delta Gold, have outlined a resource totalling 5.55Mt @3.6 g/t Au (640,000 ounces). A number of other targets have yet to be drilled.
Terry Morris has built up a stake of about 9.5% in Monto and has gained a seat on the board. Monto has a large ilmenite resource near Monto in QLD.
Production costs at the Nolan's gold project in QLD are budgeted to fall 12% in 1998/99, from $349/ounce to $308/ounce.
Pima has announced a $1.51 million non-renounceable entitlement issue to finance its own drilling program in the Gawler Craton (Sandstone project) and Adelaide Hills (Reservoir and Wheal Ellen) . In addition Pima has farmed into BHP Minerals' magnesite project at Leigh Creek in SA.
Drilling at the Indee project, near Port Hedland in WA, has intersected high-grade mineralisation at the Withnell (18m @ 5 g/t Au) and Camel 1 prospects (15m @ 9 g/t Au and 4m @ 12.3 g/t Au).
Triako has confirmed a high-grade underground resource at its Mineral Hill mine in NSW, containing about 60,000 ounces of gold and 3,000 tonnes of copper. Existence of the body has been known since 1988 but was not drilled at the time. Triako has laso hit high-grade intersections north and south of the existing resource.
This new ore body will also provide the cash flow to drill areas around Mineral Hill which have not yet been properly explored.
There has been a 50% shortfall in the recent $35.4 million 1-for-10 rights issue; major shareholder Malaysian Mining Corp took up its full entitlement. The issue was underwritten and the funds raised will be used to develop the 33.3% owned Cuango alluvial project in Angola, the 48% owned Cempaka alluvial project in Indonesia and the 77.4% owned hardrock Merlin project in the Northern Territory.
Electrometals Mining says the company's patented metals recovery technology has moved from prototype models to commercially saleable products. The company is close to completing installation on a production plant for the US-owned Grasberg operation in Irian Jaya. It is also in discussion with a listed Australian miner and is to undertake a pilot project in Europe.
Electrometals is reconstructing its capital, pulling the issued capital back from 47 million shares to 19 million shares; it is also offering a free option to all shareholders registered at 31 October. The options are exerciseable at 30¢ for 12 months.
Rio Tinto has increased its stake in Comalco from 67.04% to 68.14%.
The NSW Land and Environment Court has ordered Aboriginal applicants Andrew Donnelly and David Mundine to pay the costs of their failed action over the Timbarra Gold Project to Ross Mining NL.
In making the costs order, His Honour Mr Justice Talbot rejected the applicants' argument that they had brought the action in the public interest. He ruled instead that "[a]lthough the issue of native title is a prominent issue in contemporary Australia, its existence at common law has been confirmed by the High Court and recognised by the Native Title Act ...There is no identified public interest in attempting to vest this Court with jurisdiction to hear and determine what, in effect, amounted to a claim for establishment of native title."
Mr Justice Talbot went on to say that the rights claimed by the applicants "are, in a sense, private rights, notwithstanding the wide content of native title." He ordered the applicants to pay Ross Mining the costs of the proceedings.
At 5.30pm on 1 July 1998, the Australian Stock Exchange published a bogus release under the ASX code for Ross Mining NL titled "Timbarra Native Title Claimants Lodge Appeal Against Ross Mining".
This ASX release was neither prepared nor authorised by Ross Mining NL. Further, it contained highly defamatory statements about the Company.
As soon as it became aware of the existence of the release, Ross Mining informed the ASX that the release was bogus and defamatory, and demanded that ASX advise the market accordingly. Despite this, the ASX delayed for almost three hours before issuing a "clarification". No apology was forthcoming — the ASX merely stated that the release had been issued "inadvertently".
In an effort to ensure that the market was not misled by the bogus release, Ross Mining made its own ASX announcement at 9.01pm the same night.
St Barbara has closed its Bluebird gold mine in WA mainly due to the low gold price, lower than expected production and a low volume of forward sales.
Perpetual Trustees ceased to be a substantial shareholder.
AMP became a substantial shareholder with a relevant interest of 5.02%.
Record gold production in the June quarter should result in an improved full-year net profit. The unaudited after-tax profit for the first 3 quarters was $19.6 million while the full-year net profit for 1996/97 was $21.5 million.
Petroz N.L. announces that bidding groups in which it is a participant, have been offered three exploration permits, covering gazettal areas W97-12, W97-14 and W97-15, in the Browse Basin offshore Western Australia.
Lend Lease became a substantial shareholder with a relevant interest of 5.01%.
Contract miner Henry Walker has signed its largest underground mining contract - an $80 million deal to mine at the Yilgarn Star gold mine in WA.
Energex had secured at least 62% of Allgas through its $23/share offer and consequently Texas Utilities has withdrawn its offer and sold to Energex. This followed a decision by the Qld government to support the bid by Energex.
BHP is considering selling its $400 million power business in line with the overall review of assets.
AMP became a substantial shareholder with a relevant interest of 5.02%.
Permanent Trustee decreased its relevant interest from 8.74% to 7.51%.
Maple-Brown Abbott became a substantial shareholder with a relevant interest of 5.92%.
Novus has put its Carnarvon Basin oil and gas assets up for sale - they will only be sold at the 'right price'.
PT Bahari Cakrawala Sebuku ("PTBCS"), an 80%-owned subsidiary of Straits, has entered into an agreement with an Indonesian company, PT Tunas Muda Jaya ("PTTMJ"), to acquire an 80% indirect interest in the Busui Coal Project in East Kalimantan, Indonesia.
Under the agreement, PTBCS will carry out a confirmatory drilling program and detailed coal quality analysis on the project, which PTBCS is required to complete within a period of six months. Subject to the results of this initial evaluation, PTBCS may acquire an 80% indirect interest in the project. PTBCS has agreed to spend no less than US$100,000 on the initial evaluation, although it may terminate the agreement at any time during the evaluation period. PTBCS's interest will be held through an 80%-owned Indonesian subsidiary ("Project Subsidiary").
If PTBCS exercises the option, the agreement requires PTBCS or the Project Subsidiary to:
Sun Metals has signed a contract for almost $40 million with United Construction for the completion of mechanical works on Sun's Townsville zinc refinery.
WM has increased its offer for Aberfoyle from $2.85/share to $3/share; the offer is conditional upon WM's entitlement reaching 30%. Aberfoyle continued to reject the offer, saying it was inadequate.
Aberfoyle has formally rejected Western Metal's $270 million takeover bid, saying an independent expert (Grant Samuel & Associates) values Aberfoyle between $3.74 and $4.56 a share, at least 31% higher than the $2.85/share offer.
Panda Investments Pty Ltd increased its interest from 16.86% to 17.89%.
Queensland government-owned Ergon Energy has signed a $10 million-a-year contract to supply electricity to 300 Victorian government sites.
Scientific Services increased its interest from 31.93% to 53.61%.
Resolute announced a record full-year result (to 30 June 1998) with overall gold production up 27% to 445,984 ounces and with cash costs down 35% to $260/ounce. Resolute's attributable production was up 23% to 360,274 ounces. The Ghana-based Obotan mine, in its first full-year of operations, was a major contributor recording 149,054 ounces including a record 39,184 ounces in the June quarter.
In the 6-months to 30 June production at the 50% owned Tiwest mineral sands and titanium dioxide JV rose 8.4% to 137,606 tonnes.
BHP has retrenched 172 employees at its Ok Tedi copper mine in PNG in a drive to cut costs in the face of depressed prices.
Centaur Mining's credit rating might be cut by Standard & Poor's because its gold deposits were not as good as expected and it would not be able to produce the gold as cheaply as forecast. Centaur's US$225 million of bonds sold to US investors late last year are rated as "B+" by S&P's, the seventh lowest rating it gives, ranking its bonds as junk.
Frontier Petroleum has sold its remaining 3.17 million shares in Anzoil NL to Maurel & Prom (a subsidiary of French-listed Electricite et Eaux de Madagascar)for $718,880.
MIM confirmed it would sell the majority of its shareholding in German copper and precious metals refinery Norddeutsche Affinerie; MIM's stake will drop from 35% to about 10% on the sale of 8 million shares @ Dm25/share.
Tyndall Australia increased its relevant interest from 8.10% to 9.41%.
BHP has received 3 preliminary offers to purchase the underperforming Moura coal mine in Qld.
Imports of Australian coal into the Philippines in the first quarter of 1998 fell almost 50%, compared to the corresponding period in 1997, emphasising the severity of the downturn and increasing competition from Indonesian mines.
Danae is planning to move its operations to London after failing to arouse local interest in its 460,000 ounce Sappes gold project in Greece.
Gondwana Resources (40% owned by Golden Valley Mines) has taken a placement of 50 million Danae shares @ 7¢ each, injecting $3.5 million into the project. Golden Valley Chairman Warren beckwith will take the chair on Danae's board following the placement.
Exploration production at the Elizabeth Hill silver project in WA is due to commence in the next few months with plans to drive the shaft down to 102m. A drive at 102m will test the continuity of the mineralisation.
Shareholders are expected to approve the placement of 2 million shares enabling Exodus to purchase 2 gold tenements, north of Laverton, in WA; they include the historic Mikado prospect where there is a current high-grade resource of 87,000 ounces.
Gallery Gold has acquired the 121km² Signal Hill prospect in the Tati greenstone belt in Botswana. Gallery will spend $400,000 to earn an 80% interest. The prospect has a resource, estimated from a 1984 drilling program, of 201,000 ounces.
Under instructions from Sons of Gwalia and Mt Burgess Gold Mining Co, Minasco is selling the 1million tpy gold treatment plant & infrastructure from the Harbour Lights Mine in WA.
New Millenium Resources is acquiring Greenvale Mining/Esperance Mining's Greenland rare earth's project in return for a 7.5% gross royalty.
Sovereign has raised $1.5 million - the money will be used to complete a bankable feasibility study for its manganese sulphate project in the Pilbara.
Significant gold intercepts have been reported from the Horan's Small Dam project near Kalgoorlie in WA.
Suncorp General Insurance Ltd & entities ceased to be a substantial shareholder.
Ballarat Goldfields N.L. (BGF) advises that it has reached an agreement with Ballarat Consolidated Gold N.L. (BTD) to acquire the historic Ballarat West goldfield.
This purchase, subject only to satisfaction of certain conditions, delivers substantial exploration acreage to Ballarat Goldfields, thereby consolidating its pre-eminent tenement position across this notable gold province. BGF will acquire all the issued capital in a BTD subsidiary, Phoenix Resources N.L., an unlisted Public Company .
In consideration BGF will pay $418,000 cash for Phoenix plus $32,000 for two strategic freehold titles. In addition, BGF will pay a royalty of up to 4,000 ounces of gold sourced from production within the licences.
This strategic acquisition provides further reinforcement of BGF's exploration focus within the Central Highlands Region of Victoria and follows its recent purchase of the nearby Berringa goldfield (announcement on 3 June 1998).
Maple-Brown Abbott increased its relevant relevant interest from 5.03% to 6.07%.
AXA-UAP & National Mutual Holdings decreased its relevant relevant interest from 10.20% to 9.15%.
Tyndall Australia increased its relevant relevant interest from 12.63% to 11.09%.
Copper slid to its lowest closing price in 11 years as signs of a slowdown in US demand added to concern over falling Asian demand. The benchmark 3-month copper forward contract on the LME closed at US$1,602/tonne.
3-month nickel fell to US$4,225/tonne, 3-month zinc fell to US$1,010/tonne, 3-month tin fell to US$5,550/tonne and 3-month aluminium fell to US$1,312/tonne.
Grange has entered into an agreement with a group of investors for the sale of a 96% interest in the Horseshoe Lights Mine, associated plant and infrastructure and the surrounding tenements for $4.125 million, generating a profit to the Grange Group of approx. $3.36 million.
Grange will have a 4% interest in the Hoeseshoe Mine partnership and will manage the Partnership assets, including the Horseshoe Lights Mine.
Franklin Resources Inc decreased its relevant relevant interest from 10.20% to 9.15%.
AXA-UAP & National Mutual Holdings decreased its relevant relevant interest from 9.79% to 8.73%.
The ASIC has found ground for a modification of the Federal Court ruling that would provide scope for future pre-offer cash bids. The ASIC gave an exemption that allows WM to offer institutions with less than 1% shareholding in Aberfoyle the opportunity to participate in the funding package.
Permanent Trustee Company increased its relevant relevant interest from 9.54% to 11.17%.
Crest is to fast-track the development of its Arthur Lyons River magnesite project in Tasmania after securing exclusive development technology. An agreement with the Ukrainian National Research and Design Titanium Institute will wipe about $40 million off the project's $612 million cost and save 18 months on a feasibility study.
Dominion has completed the $18 million sale of the Yakabindie nickel project to North. Further planned asset sales are set to see cash reserves top the $40 million level. Dominion's new growth strategy includes asset acquisitions and a 10% share buy-back scheme.
Energex increased its stake in Allgas to 12.5%.
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Herald is pleased to announce that it has reached agreement in principle with Mining Project Investors Pty Ltd (via subsidiary MPI Gold Pty Ltd) and Pittston Mineral Ventures of Australia Pty Ltd (collectively "MPI/Pittston") to earn up to a 60% interest in the various assets comprising the Coolgardie project currently held by Herald and its subsidiaries, with the intention of forming a joint venture to further develop the project.
Herald believes that the agreement has the potential to deliver significant benefits, namely:
Herald is pleased to announce that final approval has been received from the Vancouver Stock Exchange for the previously announced sale of Herald's remaining Indonesian exploration interests to our associate Canadian-listed International Annax Ventures (Inc) ("IAX"), which has funded all exploration expenditures on the properties to date, with Herald as operator.
Following the receipt of various tranches of shares in IAX (some of which remain conditional upon the completion of certain matters), Herald expects to own up to 49% of the issued capital in IAX.
Dairi Contract of Work (Sumatra) (IAX interest up to 70%)
Following discovery of lead-zinc rich, stratiform, massive sulphide mineralisation of possible sedimentary exhalative (SEDEX) origin at the Sopokomil prospect in late 1997, Herald has put in place a modest fast-track program culminating in 1000m of diamond drilling to confirm the model, style, continuity, mineralisation, and tenor of this potentially major discovery.
Diamond drilling of 1,000m, mainly NQ3 coring, has been let to a contractor and is about to commence. The program is directed at the 1500m long, open-ended soil geochemistry Zn-Pb anomalies which have been subjected to ground TEM (geophysical) survey.
The principal targets are zinc and lead rich stratiform massive sulphide (SEDEX) horizons which have been discovered in four localities in an 1100m strike extent. Disseminated, sometimes strong, zinc-bearing mineralisation in limestone interbeds in the predominantly black shale context is also being targeted.
Maple-Brown Abbott increased its relevant relevant interest from 7.17% to 8.57%.
Maple-Brown Abbott increased its relevant relevant interest from 5.33% to 6.42%.
Maple-Brown Abbott became a substantial shareholder with a relevant interest of 5.43%.
Straits Resources Limited's exposure to the Year 2000 problems would arise from the computer hardware and software used by the group and its suppliers and service providers. Straits operates the Girilambone Copper Mine in NSW, the Sebuku Coal Mine in Indonesia and have exploration interests in Australia and Indonesia.
The assessment is continuing, however we are pleased to advise that to date we have not identified any significant exposure. Straits have adopted the Year 2000 compliance definition set out by the British Standards Institution (DISC PD2000-1). Our aim is to ensure that all our systems will be tested and Year 2000 compliant by early 1999. On our present assessment, the estimated total costs to ensure we are Year 2000 compliant would be minimal.
Queensland's State-owned Energex increased its stake in takeover target Allgas to 9.9%. Energex has yet to receive government approval for the $23/share bid.
Since the first week of March 1998, the emphasis has been on development with the two-boom jumbo. The horizontal development has been mainly in the north drive on the 375 metre level, to gain access to the return air shaft location, and on the 415 metre level to gain access to the bottom of the Hart Shaft (in preparation for the excavation of the permanent Hart Shaft skip loading station between the 375 metre and 415 metre levels).
The main access 1 in 8 decline, which commenced from the 375 metre level on the southern side of the Tasmania Reef, passed through two splits of the reef at a depth of around 430 metres in early June 1998, very close to the C39 diamond drillhole intersection. Ongoing development of the decline will all be on the northern, or footwall, side of the Tasmania Reef. Ground conditions have proven to be excellent.
While above the lowest historical mining level (455 metres depth), hole C39 and two holes to the east of C39, holes C27 and C40, had indicated that the reef in this area remained unmined and could be a source of early ore. Given the limited data however, no reserves have been calculated for this area so far. It is planned to commence strike driving, to the east, the two reef splits encountered in the decline in July 1998.
Hole C39 intersected two reefs separated by approximately 10.5 metres horizontal of internal waste. The hangingwall reef was 1.08 metres horizontal at 18.2 g/t gold. The footwall reef was 1.30 metres horizontal at 9.9 g/t gold.
The decline intersected the same two reefs 12.5 metres apart. The hangingwall and footwall reefs were 0.8 metres and 1.05 metres horizontal respectively. Two channel samples across the hangingwall reef on the eastern wall of the decline averaged 4.5 g/t gold and 16 random (and diluted) shovel samples from the stockpile of the mined hangingwall reef averaged 7.2 g/t gold. A channel sample across the footwall reef on the eastern wall of the decline averaged 20.0 g/t gold.
Following detailed technical and commercial evaluation of all the conforming and non-conforming bids, the Joint Venture is proposing to award the lump-sum contracts in July 1998.
Plans to build a gas pipeline from PNG to Queensland advanced yesterday after a major customer signed a heads of agreement; the Qld Government-owned Stanwell Corp will use PNG gas for its $500 million power station near Townsville.
The first phase of a deep diamond drilling program has now commenced with Strata Exploration Pty Limited moving their diamond drilling rig onto the Eureka site today.
The new licence is part of the Mt Alexander Goldfield Joint Venture (Duketon Goldfields NL -75% and YKR International Resources Limited - 25%). EL 4235, totaling 100.3 ha, is located approximately 900 metres west of the Wattle Gully Mine and covers the Eureka Anticline which hosts a number of old mine workings including the Eureka, Vineyard, Twomey and Cobbler Gully mines.
Exploration during the 1980's and revision of geological concepts during the 1990's indicates that the prospect may host significant mineralisation.
In 1982 CRA Exploration Pty Limited drilled two deep diamond drill holes, 150 metres apart, south of the Eureka Shaft to a depth of about 300 metres. Both holes intersected auriferous quartz veins below the old workings at about 250 metres below surface. The sulphides and visible gold in the quartz intersections convinced geologists at the time that a major new mineralised structure had been discovered below the old mine.
CRAE estimated the resource potential of the immediate Eureka Mine area at 1.2 million tonnes. No allowance was made for the resource potential to the north or south of the mine. Due to the resource potential of this new tenement and its proximity to the currently operating Wattle Gully Treatment plant, the Mt Alexander Goldfield Joint Venture considers the Eureka area one of the best exploration targets in the project area.
Initially three vertical 300 metre deep HQ diamond drill holes will be drilled in the Eureka Mine area adjacent to the CRAE holes. These first phase holes will target the area up dip of the CRAE intersections where the reef structure intersects the east limb of the Eureka Anticline, approximately 230 metres below surface.
Golden Cross Resources NL (GCR) has completed approximately 500m of reverse circulation drilling at the Yellowstone Prospect on its 100% owned Broken Hill property. The target is Selwyn or Ernest Henry style gold-copper mineralisation associated with ironstone formation. The drilling follows up on previously reported systematic rock chip sampling which returned two results of 16 g/t gold over 4m. Assays are awaited.
On GCR's 90% owned West Wyalong property Newcrest Operations Limited (Newcrest) is scheduled to commence reverse circulation drilling next week at the Narragudgil Prospect. The planned drilling programme consists of 24 reverse circulation holes for 5,000m to test for porphyry copper-gold mineralisation in Gidginbung Volcanics along the Gilmore Suture.
GCR Non-Executive Director John H Hill, presently based in Europe, tendered his resignation, received on 30 June 1998, due to ongoing work commitments in Europe.
Petroz advises that the WA-250-P JV (Petroz 50%) has relinquished the exploration permit in the Carnarvon Basin; recent seismic interpretation did not indicate a high level of prospectivity.
St Barbara has purchased the Reedy gold project in WA from the Mt Lyell Mining Co for $2.5 million. The tenements have published resources of 580,000 ounces of gold @ 3.5 g/t and adjoin the southern boundaries of St Barbara's Bluebird mine.
The Company is pleased to announce that after a protracted licensing process, that the Mt Alexander Goldfield Joint Venture (YKI 25% earning up to 75%) has finally been granted EL 4235 over the old Eureka and Vineyard mining area on 14 May 1998 and the work program for the diamond drilling program was finally approved on 25 June 1998.
The first phase of a deep diamond drilling program has now commenced with Strata Exploration Pty Limited moving their diamond drilling rig onto the Eureka site (EL 4235) today.
The new licence is part of the Mt Alexander Goldfield Joint Venture (Duketon Goldfields NL -75% and YKR International Resources Limited - 25%). EL 4235, totaling 100.3 ha, is located approximately 900 metres west of the Wattle Gully Mine and operating treatment plant and covers the Eureka Anticline which hosts a number of old mine workings including the Eureka, Vineyard, Twomey and Cobbler Gully mines.
Exploration during the 1980's and revision of geological concepts during the 1990's indicates that the prospect may host significant mineralisation.
In 1982 CRA Exploration Pty Limited drilled two deep diamond drill holes, 150 metres apart, south of the Eureka Shaft to a depth of about 300 metres. Both holes intersected auriferous quartz veins below the old workings at about 250 metres below surface. The sulphides and visible gold in the quartz intersections convinced geologists at the time that a major new mineralised structure had been discovered below the old mine.
CRAE estimated the resource potential of the immediate Eureka Mine area at 1.2 million tonnes. No allowance was made for the resource potential to the north or south of the mine. Due to the resource potential of this new tenement and its proximity to the currently operating Wattle Gully treatment plant, the Mt Alexander Goldfield Joint Venture considers the Eureka area one of the best exploration targets in the project area.
Initially three vertical 300 metre deep HQ diamond drill holes will be drilled in the Eureka Mine area adjacent to the CRAE holes. These first phase holes will target the area up dip of the CRAE intersections where the reef structure intersects the east limb of the Eureka Anticline, approximately 230 metres below surface. The main target zone will be reached in about two weeks time and results will be releases as soon as they are available.
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