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Exploration News |
June Quarterly Report - Highlights
Quarterly Report - For The Period Ended 30 June, 2000
Exploration Activities - Victorian Properties
Mt Alexander Goldfield Project (85%)
Reef Mining NL completed their crushing at the mill on 26 May 2000 and mill has been placed on a care and maintenance program from 26 May 2000.
No exploration activities were carried out during the quarter.
Golden Mountain Project (100%)
No field work was undertaken during the period. The Company is seeking to sell or joint venture the Project.
Exploration Activities - Duketon Belt Joint Venture (25%)
The Duketon Belt Project is a joint venture arrangement between Duketon Goldfields Limited (25%) and Johnson’s Well Mining NL (75% and manager) established to explore tenements totalling 123 square kilometres enclosing some 42 kilometres strike of the auriferous Duketon Belt greenstone formation located to the north of Laverton, Western Australia.
GeneType
On 14 April 2000, Duketon announced to the market that it had entered into an option arrangement to initially acquire a 10% interest in GeneType AG, with a further option to acquire the balance of the issued shares in GeneType on or before 31 January 2001.
GeneType comprises a group of biotechnology companies with headquarters in Switzerland, which have made significant discoveries over the last 10 years in the field of advanced DNA genetics. This work was conducted in USA and Australia and has led to several broad gene-based patents now held by GeneType. In 1998, GeneType was awarded a multi-million dollar START grant by the Australian Government to support development of GeneType’s advanced DNA research in Australia. GeneType already operates the largest fully accredited testing laboratory in Australia for performing disputed paternity testing by DNA techniques. The current investment by the Company will encourage pursuit by GeneType of several new opportunities protected by its patents in the areas of human, animal and plant genetic diagnostics and genomics.
USA
Icon has progressed the Louisiana USA oil and gas deal with Bayou Choctaw Inc and has completed a partial closing of the Purchase & Sale Agreement prior to 30th June 2000.
Tender preparations and detailed mapping commenced for the first well to be drilled in the Bayou Choctaw area.
AUSTRALIA
Native title issues are nearing resolution in respect of areas in the Surat Basin which are covered by Freehold Title.
The Department of Mines and Energy is expected to review applications within the next three months to allow work programmes to commence.
HIGHLIGHTS
HIGHLIGHTS - JUNE QUARTERLY REPORT
HIGHLIGHTS
* Inferred resource under the JORC Code of 200 million tonnes grading 1.26% Nickel equivalent at a 0.5% cut off at Wingelinna.
* Wingelinna resource open at depth and in all directions.
* High grade gold results from Bronzewing reverse circulation drilling.
HIGHLIGHTS OF QUARTER'S ACTIVITIES
Diamonds - Sweden
* The Company's Swedish subsidiary, Alcaston Diamond Exploration AB, completed its seed capital raising in Sweden having received approximately SEK 4.9 million (approximately $A 0.95 million).
* This funding forms part of a proposed larger capital raising of up to SEK 50 million in Sweden to be completed in conjunction with an Initial Public Offering (IPO), and listing of Alcaston Diamond Exploration AB in Sweden.
* A geophysical interpretation of the airborne geophysical data over the main Swedish diamond exploration licence has identified approximately 300 targets of which 22 are high priority targets, having geophysical signatures appropriate to kimberlite pipes.
* A detailed reconnaissance sampling field work program and follow up of previous results and targets generated commenced during the quarter.
Diamonds - Australia
* Subsequent to the end of the quarter Alcaston Mining NL acquired an option over a promising diamond exploration prospect known as Hiles Lagoon, located in the Terowie Kimberlite Field in South Australia.
HIGHLIGHTS
* Drilling locates D3 and S3 ribbon zones
* Company confirms the ribbon repeat theory beneath the Deborah and Sheapshead lines of reef
* Decline advance on target at 2900 metres
* Commenced deep drilling at the northern end of the goldfield
PROJECT MILESTONES
QUARTER EVENT
Third Quarter, 2000 * Complete D3/S3 drilling
Fourth Quarter, 2000 * Complete deep drilling in the north
* Commence D4/S4 drilling
First Quarter, 2001 * Decline at target depth
* Bulk sampling of New Bendigo ribbons
REPORT FOR QUARTER ENDED JUNE 30, 2000
PRODUCTION SUMMARY
Bligh derives oil and gas production from its 1.62% working interest in the TAWN Joint Venture, Taranaki Basin, New Zealand and from its Bayou Choctaw project in Louisiana, United States. Production net to Bligh from these projects is approximately 60 barrels of oil per day and 400 thousand cubic feet of gas per day.
HIGHLIGHTS- JUNE QUARTER
EGYPT
Exploration drilling continued north of the Amun zone and the drilling shows that the mineralised zone veers to the east in the Ra zone before continuing north up into the Gazelle zone. Drilling is continuing to define the limits of the mineralisation as it continues through to the north.
An independent consultant has been on site taking a series of check samples and verifying the existing methods of sample collection and preparation, along with down hole surveys and drilling methods. This will result in the production of a report which will form part of the pre-feasibility/feasibility study.
Second Quarter Activities
HIGHLIGHTS
* Spool Media Pty Ltd
* Kambalda West - Renegotiated
* Cat Camp - Mapping
CORPORATE
Spool Media Pty Ltd - During the quarter negotiations continued with the directors of Spool Media Pty Ltd with regard to the acquisition of that company. Spool Media is a convergent media company specialising in the production of film, television, internet and multi-media content. Spool recently entered into an exclusive agreement with The Wiggles Touring Pty Ltd to develop Wiggle World, an internet based playground for children. In addition Spool has acquired the business interests of ARCOM which includes internet based B2B business particularly in coverage of court room trials and related legal proceedings.
EXPLORATION
KAMBALDA WEST PROJECT
CKGM and New Hampton Goldfields Limited have agreed to a revised set of terms for the sale of this project. Under the new arrangement CKGM will dispose of its entire interest in the Kambalda West Project on the following terms:
* $500,000 cash of which $100,000 has been paid into our solicitors trust account pending settlement;
* $500,000 further payment upon the production of 250,000 ounces of 2,500,000 dry tonnes or ore, whichever is achieved first;
* $1,000,000 further payment upon the total production of 500,000 ounces or 5,000,000 dry tonnes of ore, whichever is achieved first.
A formal sale and purchase agreement is being prepared and it is expected that settlement will be achieved within 4 - 6 weeks.
CATCAMP
Reconnaissance geological mapping at 1:10,000 scale was carried out during the quarter over the two exploration licences held by CKGM.
The Cat Camp project covers the north extension of the Lake Johnstone greenstone belt which hosts the Emily Anne and Maggie Hayes nickel deposits located 40 kilometres to the south-southeast. Nickel mineralisation has also been identified by previous explorers approximately 20 kilometres to the south-east of Cat Camp.
There is extensive sand cover over a granitic protolith, however detailed aeromagnetics flown last year and surface sampling of float material suggests ultramafic, banded argillite and mafic rocks also occur.
Reconnaissance RAB and auger drilling has been proposed to test the numerous magnetic and structural targets.
LAKE REBECCA
No field work was carried out during the quarter. Consideration is being given to a diamond drilling programme of two to three holes totalling 600 - 900 metres to improve our understanding of the stratigraphy and the nature of the gold mineralisation.
LEFROY TASMANIA
Allstate Explorations NL operators for this joint venture advise that no exploration was carried out during the quarter.
Copper Mines and Metals Ltd entered an option agreement with Plato Mining Pty Ltd to joint venture into a group of mineral exploration projects in Western Australia. The projects are prospective for gold, platinum group metals, nickel, vanadium, titanium and chromite. They are the Londonderry Nickel Sulphide Project, the Gindalbie Gold Nickel Project, the Unaly Vanadium Project and the Siberia Gold Project.
SUMMARY FOR THE QUARTER
* Exploration drilling achieved significant early success. At Anomaly 17, 10 holes have intersected mineralisation extending over 100m and is 60m wide varying in thickness up to 52 metres. The body is close to the surface, above the water table and remains open to the west. Drilling is continuing.
* Drilling at Chutney West also intersected significant manganese mineralisation which extends over 120m and is 30m wide varying in thickness up to 45 metres. It appears to be an extension of the existing Chutney ore body.
* Mining continued at the Big Mack and Hanna Deposits and commenced at the Chutney Deposit.
* During the quarter manganese ore was shipped to markets in Japan, China and the Ukraine, bringing the total tonnage shipped in the financial year 1999/2000 to 253,607 tonnes.
* A heritage agreement has been reached with the Nyamal people, registered Native Title claimants to the Woodie Woodie area.
* The acquisition of the Bell's Pit manganese leases was finalised by the Company during the quarter.
* The benchmark price for manganese lump has been set at US$2.03 per manganese unit. This represents a 6.84% increase.
* A five year sale contract is being finalised for China with Noble Resources Ltd.
* Financial performance was impaired in the second half of the financial year due to the effect upon production of extreme flooding and consequential shipping delays. A small loss is likely to be reported.
Second Quarter Activities Report
PRODUCTION
JUNE 2000 QUARTER
Total raw coal production in the quarter was down 31% compared with the same period in 1999. The June 2000 quarter was affected by a longwall relocation.
3 Months to 3 Months to
(tonnes) 30-Jun-99 30-Jun-00
Open Cut production - -
Underground production 819,462 572,257
Total Coal Mined 819,462 572,257
Saleable Coal Produced 638,408 366,700
June 2000 YTD
Total underground raw coal production for the six months to 30 June 2000 was 35% higher than the corresponding period in 1999. As previously announced the opencut operation was suspended in July 1999.
6 Months to 6 Months to
(tonnes) 30-Jun-99 30-Jun-00
Open Cut production 20,079 -
Underground production 1,094,772 1,478,624
Total Coal Mined 1,114,851 1,478,624
Saleable Coal Produced 789,348 1,023,631
EXPLORATION/ FEASIBILITY STUDIES
There was no exploration carried out during the June 2000 quarter and half year period.
SUMMARY FOR THE QUARTER
* Exploration drilling achieved significant early success. At Anomaly 17, 10 holes have intersected mineralisation extending over 100m and is 60m wide varying in thickness up to 52 metres. The body is close to the surface, above the water table and remains open to the west. Drilling is continuing.
* Drilling at Chutney West also intersected significant manganese mineralisation which extends over 120m and is 30m wide varying in thickness up to 45 metres. It appears to be an extension of the existing Chutney ore body.
* Mining continued at the Big Mack and Hanna Deposits and commenced at the Chutney Deposit.
* During the quarter manganese ore was shipped to markets in Japan, China and the Ukraine, bringing the total tonnage shipped in the financial year 1999/2000 to 253,607 tonnes.
* A heritage agreement has been reached with the Nyamal people, registered Native Title claimants to the Woodie Woodie area.
* The acquisition of the Bell's Pit manganese leases was finalised by the Company during the quarter.
* The benchmark price for manganese lump has been set at US$2.03 per manganese unit. This represents a 6.84% increase.
* A five year sale contract is being finalised for China with Noble Resources Ltd.
* Financial performance was impaired in the second half of the financial year due to the effect upon production of extreme flooding and consequential shipping delays. A small loss is likely to be reported.
Fourth Quarter Activities Report
HIGHLIGHTS
* Successful audit of March gold resources
* Gold resources still growing
* Strategic drill targets identified
* Internova wins IBM endorsement
In the quarter ended 30th June, 2000 Charters Towers Gold Mines NL (CTGM) received confirmation of a successful independent audit of its previously announced March gold resource, finding no material deficiencies in the total Mineral Resources. CTGM has dug deep into its intellectual property - computerised mining records spanning over a century - to help identify targets for new drilling. The new drilling program will follow earlier deep drilling by such companies as PosGold, CRA, and BHP/Homestake on tenements now owned by CTGM. Total mineral resources rose again, as did the gold grade of these resources.
Internova MCI, the information technology company in which CTGM invested earlier this year, made solid progress, installing another My Community program and winning prestigious endorsement as an IBM e- Commerce Partner and has concluded successful negotiations for a share swap agreement with a public listed company.
Fourth Quarter Activities
HIGHLIGHTS
* SVARTLIDEN GOLD PROJECT
The resource drilling began in April at the Svartliden Gold Project in Sweden has continued to provide high-grade intercepts with the best results to date including;
30m @ 17.07g/t gold from 29m down hole
31m @ 12.59g/t gold from 22m down hole
3m @ 69.5 g/t gold from 38m downhole
8m @ l5.88g/t gold from 5m downhole
20m @ 6.42 g/t gold from 10m down hole
4m @ 17.84g/t gold from 4Om downhole
8m @ 9.28 g/t gold from 17m down hole
* WELD RANGE NICKEL LATERITE PROJECT
JV partner Anaconda Nickel Ltd proposes a further 8,600m of drilling at Weld Range for the September Quarter.
Drillsearch Energy N.L.'s Canadian subsidiary, Circumpacific Energy Corporation has reported that the 4,500 metre Devonian Gas Well in which it is participating has a further amended spud date. The operator, Talisman Energy Inc., has advised that it anticipates the rig will be on site on 31st July, 2000 (Canadian time) and that drilling should commence on or around 2nd August, 2000.
The well is designated as Lambert 5-4-52-22 W5M.
HIGHLIGHTS FOR THE QUARTER
Fourth Quarter Activities
HIGHLIGHTS
THE ROUGH RANGE OILFIELD
EXMOUTH GULF,
WESTERN AUSTRALIA
Empire Oil & Gas N.L. will, through its wholly-owned subsidiary, Rough Range Oil Pty Ltd, will commence production from its Rough Range 1B well in August 2000 at an initial rate of approximately 500 barrels of oil per day. The Company has entered into both a forward sales contract with BP Australia Limited to sell the oil at US$25 per barrel for 12 months and a competitive transportation contract. The production and sale of crude oil and cash flow is a significant step in the evolution of the Company by achieving a production stream just over 2 years after its listing on the ASX in January 1998 as a petroleum exploration company.
ECLIPSE AND ECLIPSE WEST PROSPECTS ONSHORE,
PERTH BASIN,
WESTERN AUSTRALIA
The major focus of the Company still remains to be a producer of gas reserves to the Western Australian market from its Central and Southern Perth Basin permit areas. The Eclipse and Eclipse West Prospects located in EP 389 are the Company's next drilling objectives. They are located just 54 kilometres from the City of Perth. Both prospectus demonstrate unfaulted anticlines with 4 way dip closures. This type of structural configuration makes both prospects highly prospective, both having the potential to contain large volumes of gas. The calculated volumes of In Place Gas is 557 Billion Cubic Feet (600 Petajoules) for Eclipse and 266 Billion Cubic Feet (287 petajoules) for Eclipse West.
PLACEMENT
Empire Oil & Gas N.L. placed 10,000,000 New Ordinary Shares at an issue price of $0.15 per share to clients of D&D-Tolhurst Ltd together with 1 attaching Option to subscribe for a share exercisable at $0.20 on or before 31 December 2002 for every 2 New Shares subscribed for pursuant to a Prospectus lodged with the Australian Securities Investment Commission on 13 April 2000 and approved at a General Meeting of Shareholders on 2 May 2000.
The Placement was made and allotted in May 2000 raising gross total working capital of $1,500,000. The funds will be used to assist the Company in meeting part of its planned year 2000 oil and gas exploration programme. The new shares and new options were given official quotation on the ASX on 30 May 2000.
HIGHLIGHTS FOR THE QUARTER
FRASER RANGE - WA
(Geographe 100%, diluting to 25%)
Homestake Gold of Australia Limited being operator of the Fraser Range Joint Venture reported that no field work was conducted on any of the Fraser Range JV tenements during the quarter.
RAB/AC drill testing of aeromagnetically defined lithostructural targets located proximal to the extensive gold soil anomalism at the Torquata Prospect will be conducted early in the coming quarter.
HIGHLIGHTS FOR THE QUARTER
* Preliminary feasibility studies of the Minjar Project were completed.
* Bankable feasibility studies into the development of the Minjar North Project commenced.
* Mineral Resources were upgraded to 440,000 oz gold of which 256,300 oz are in the Measured and Indicated categories.
* Mezzanine finance agreed to with Macquarie Bank Ltd for up to $2 Million to cover the costs of the feasibility study and purchase of plant and equipment as required.
Fourth Quarter Activities
The Company continued its active program of generation and acquisition of high-potential mineral exploration opportunities, however progress was slow on established joint venture projects during the June quarter, as several joint venture operators reported delays caused by protracted Native Title negotiations or access difficulties caused by late, heavy rainfall.
Fourth Quarter Activities
ROE HILLS JOINT VENTURE (WMC Resources Ltd earning 75%)
WMC Resources Ltd (WMC) will be conducting further drill testing for nickel sulphide mineralisation in the Talc Lake area during the current quarter.
No significant results were received from the drilling program carried out at the R7 gold prospect in the previous quarter.
FRASER RANGE ROYALTY
During the period, Fraser Range Holdings Ltd (Fraser) sold its interests in the Fraser Range dimension stone operations to Allied Granites Pty Ltd (Allied). As required by the Deed between Gold Partners and Fraser, Allied have entered into a Deed of Covenant with Gold Partners under which Allied assumes all the liabilities of Fraser to Gold Partners including the payment of royalties on Dimension Stone production.
KIRGELLA
The company completed a review of the Kirgella project during the quarter. Exploration results have proved disappointing and Exploration Licence E28/603 was surrendered.
QUARTERLY REPORT FOR THE THREE MONTHS ENDING 30 JUNE 2000
HIGHLIGHTS
* BINALIW, PHILIPPINES
Commencement of ground magnetic survey and discovery of further mineralised outcrop.
* KOOLINE WEST, WA
Definition of two new higher order surface gold anomalies with peaks up to 1.2 g/t.
* CORPORATE
Agreement to sell sub-35 metre rights at North Bandalup (near Ravensthorpe, WA) for $2.1 Million.
JUNE QUARTER - ACTIVITY HIGHLIGHTS
* MAURITANIA:
Woodside completed a large 3D seismic survey over portions of the Joint Venture Area, offshore Mauritania during the previous quarter. Initial data processing has now been completed and interpretation is in progress to select final drilling locations for the three well farmin drilling programme which is expected to commence in the first quarter 2001.
* MAURITANIA:
Dana Petroleum plc, has completed the Year One seismic mapping and technical study of Blocks 1, 7 & 8, offshore Mauritania. A number of significant hydrocarbon leads have been identified in all three blocks and the Joint Venture have now committed to the Year Two seismic programme.
* ITALY:
The Colombo # 1 gas exploration well was plugged and abandoned on 30 April, 2000. Colombo # 1 discovered significant gas bearing sandstones within the Miocene Liguridi Flysch, but the well flowed gas at uncommercial rates when tested through casing.
* PHILIPPINES:
The Fuga # 1 exploration well was plugged and abandoned at a depth of 1,796m on 8 June 2000 with no significant hydrocarbon shows. The well was drilled by PNOC under a farmin agreement whereby Hardman was not required to contribute to the cost of drilling.
* MALTA:
Negotiations are in progress for shooting a 2D seismic survey in the next quarter.
JUNE QUARTER - SUMMARY OF ACTIVITIES
The Company greatly strengthened its financial position during the quarter through a successful $4.6 million pro rata issue of convertible, redeemable preference shares. IMC is now in a very sound financial position and will be able to advance its Costerfield resource project while providing strong support for the development IP Services Inc's US telecommunications business. The Company now owns approximately 38% of IP Services' capital.
COSTERFIELD ANTIMONY/GOLD PROJECT
Narrow, but very high grade antimony and gold veins were identified in a comprehensive review of all past mining and exploration activity in the Costerfield area. The veins were identified in areas that have previously been mined but have not been fully tested.
In the course of the work, the interpretive database, which will provide the basis for future work on the field, was substantially improved. Drill targets have been defined for narrow, high grade mineralisation and will be followed up in the next quarter.
The Company's mining lease, MIN 4073, and Exploration Licence, EL 3310, were renewed under the Mineral Resources Development Act for seven years and two years respectively, providing a sound tenure for further investment in the identification and development of gold and antimony resources at Costerfield.
JUNE QUARTER - HIGHLIGHTS
1. BINDULI NORTH JV (IGM 25% - INTERMIN RESOURCES NL 75%)
Following the 780 metre RC drilling program completed in the March quarter, no further work was carried out other than to analyse results in comparison to previous work completed.
However, negotiations were recommenced with a third party interested in earning an interest in the JV tenement.
2. FARGO PROJECT (FARGO RESOURCES NL - 90% IGM)
During the period the company identified errors in its entry permits which were returned for correction.
The low level Geo-Flite method spectral survey previously completed was analysed and was found to identify some 36 primary exploration targets within the 800 sqkm area covered with numerous secondary structural targets.
The company also completed payment of the balance of access payment required from Fargo Resources NL and, subsequent to the end of the period, on 19th July, 2000, received its re-issued entry permits from the Minister for Aboriginal Affairs.
Geochemical survey of the primary targets considered most prospective can now be commenced following appropriate planning.
3. LAKE KIRK PROJECT (IGM 100%)
During the quarter a party expressing possible interest in the project completed its review of the tenements but declined to proceed due to downgrading of its overall exploration budget.
No other exploration work was undertaken.
OTHER INVESTMENTS
CASTLE ENERGY NL (APPROXIMATELY 25% IGM)
The company accepted a conditional offer for its shareholding in Castle Energy NL from Anzoil NL on the basis of one Anzoil share for each Castle share on issue.
Conditions of the offer are anticipated to be satisfied during the current quarter.
LAWBRETTA (CEYLON) LTD (APPROXIMATELY 30% OF IGM)
During the quarter the company accepted an offer to dispose of its interest in this dormant Sri Lankan company, eliminating any further costs or liability. Recovery of a total of approximately A$30,000 is anticipated to be completed during August 2000.
CHANGES IN THE STATE OF AFFAIRS
During the quarter, Mr John Traicos retired as a director of the company and immediately subsequent to the end of the period, Mr Stephen W Millet retired as Chairman and as a director of the company.
Exploration continued during the Quarter on both the Binduli North and Lehmans South projects.
Exploration on the Binduli North Project resulted in the outlining of two subparallel zones of supergene mineralisation on the Peyes Farm prospect with at least 600-800 metre strike potential. Significant mineralisation was also encountered on the Teal prospect, north of the Peyes Farm tenements.
Work on the Lehmans South tenements resulted in anomalous results being recorded from three prospect areas. Further drilling is planned for the next quarter.
The Company released a public offer by Heartlink Limited of 16,270,603 fully paid ordinary shares at 20 cents each and 16,270,603 options issued at 1 cent each and exercisable at 20 cents each on or before 30 June 2003 to raise a total of $3,416,827. Oversubscriptions for a maximum of 5,000,000 Shares and 5,000,000 Options may be accepted by Heartlink to raise a further $1,050,000 under its prospectus dated 26 July 2000.
HIGHLIGHTS
METALLURGICAL - YOUNG
Five bulk samples each of 100kg taken from stored drill-sample to assess the metallurgical characteristics of the various resources. The work has already commenced and should be completed by September 2000.
SCANDIUM RESOURCES (YOUNG - LAKE INNES N.S.W.)
Jervois enters HIGH TECH. AGE in collaboration with CSIRO
FOREST REEFS - GOLD/COPPER - JOINT VENTURE NEWCREST
Newcrest reports some interesting exploration results for gold at Forest Reefs, near Cadia.
NORTH PERTH BASIN - OIL/GAS - EP111
A private investor is considering completion of a well (Jago No. 1). Recent near record oil prices in Australian dollar terms a factor.
MT MOSS
A group interested in exploiting the magnetite resource could generate cash flow for the Company in 2001.
CAPITAL RAISING - WORKING CAPITAL
The Company has placed 8 million shares and 8 million options at 4 cents with clients of Johnson Taylor Corporate Ltd to raise $320,000 for a fee of 8%.
JUNE QUARTER - HIGHLIGHTS
MT GARNET
BAU PROJECT - SARAWAK, MALAYSIA.
OVERVIEW - JUNE QUARTER:
During the Quarter, exploration work at Bau was reduced considerably pending finalisation of negotiations with potential funding partners. Fieldwork was focussed on geological mapping and sampling in order to prepare for future drilling. The slowdown in higher cost exploration on the project has allowed time for a complete re-assessment of the controlling geological structures in the district and has resulted in an untested geological model.
Field work to assist in the reinterpretation commenced in the latter half of the Quarter.
BAU LAMA
During April, survey points were established over the Bau Lama area for ground control of mapping and sampling. In May, mapping over the Bau Lama area was completed and compiled onto maps and digitised. A total of nine rock chip samples were collected during the mapping. Two samples returned anomalous results (212239, 19.0 ; 212249, 0.83 g/t Au). Both samples were composed of silicified shale exposed in an old, shallow mine-pit, at the contact with limestone. Auger soil samples collected from the area in April have been received. Five samples returned anomalous gold assays, ranging from 15 to 1070 ppb.
In May mapping and sampling over the Bau Lama prospect area was completed. The geology and results of rock chip and soil samples collected were compiled and assessed. The results were encouraging enough to propose a programme of trenching and drilling. In the following Quarter, the relevant landowners will be contacted to obtain permission to enter and construct drill rig access.
JUGAN
In March soil samples were collected from the Jugan area at the sites of structural intersections interpreted from satellite imagery, airphotos and geophysics. The results of these samples have not yet been received. Mapping continued to define a northeast to easterly striking zone of deformation in the Pedawan Shale Formation that is responsible for the structures hosting the Jugan mineralisation.
There is potential for finding more Jugan style mineralisation along this structural corridor. Once the zone of deformation has been defined, a geochemical survey will be conducted across the zone to further define areas for drill testing.
PEJIRU
In April survey points were established over the limestone flats between Pejiru and Kapor, in areas where drilling and sampling has not been conducted previously. Due to poor outcrop and thick vegetation, mapping was limited to limestone pinnacles and a full geochemical programme is planned.
The geological mapping and reassessment indicated that the limestone - shale contact (LSC) between Boring North and Pejiru has not been fully tested. A new programme of trenching followed by drilling if warranted is proposed.
THAILAND
During the quarter, the agreements for relinquishment of Menzies' interests in Thailand in favour of its joint venture partner were executed. Menzies no longer has any exploration interests in that country.
SUMMARY - JUNE QUARTER:
PROJECTS
CHINA - LIULIN COALBED METHANE GAS PROJECT
During the quarter Molopo Australia commenced a pilot production test program at it's Liulin coalbed methane gas project in Shanxi Province, China with the spudding of the LW-L1 well on May 30th 2000.
The Company's 4 well pilot production test has been designed to test production rates and suitable completion techniques at Liulin, where an earlier 3 well exploration programme indicated a substantial in-place coalbed methane gas resource.
The programme involves drilling 3 new wells, the hydraulic fracture stimulation (using different technologies) of those wells, followed by the cavity completion of the Company's existing HW-LIB well. The drilling and stimulation programme is expected to be completed during the September quarter.
After the drilling and stimulation of all 4 wells in the pilot program, Molopo will conduct a 6-12 month production test.
In the period to June 2000, the company successfully drilled the LW-L1 well, and commenced the drilling of the LW-L2 well.
Since June 30, 2000, the LW-L2 well was successfully completed and the LW-L3 well was spudded.
Both the LW-L1 and LW-L2 wells have intersected the target gas saturated coal seams at the prognosed depth and thicknesses.
Natural waterflow from both wells indicate that initial coal permeability is good, as in the nearby HW-LIB well drilled in 1996.
Both the LW-L1 and LW-L2 wells have now been drilled to target depth and await completion. Fracture stimulation for LW-Ll, LW-L2 and LW-L3 will commence upon completion of drilling the LW-L3 well. An extended production test of wells LW-L1 to L3, together with the previously drilled HW-LIB well, will follow the stimulation and production test programme.
NORTH KOREA - GOLD TAILINGS PROJECTS
During the quarter Molopo purchased and shipped a 50 tonne per hour Inline Pressure Jig (gravity separation gold plant), along with two excavators, to its Changjin alluvial gold project in the Democratic Peoples Republic of North Korea.
Since June 30, 2000, the plant was commissioned and, although designed to treat 50 tonnes of material per hour, during commissioning the plant successfully processed between 55-65 tonnes per hour.
Test production will continue over the September quarter to optimise the circuit. After a consistent period of production, operating statistics will be calculated and reported.
MONGOLIA - TSAGAAN SUVRAGA COPPER DEPOSIT
On July 5, 2000, the Company was advised that the Mongolian Courts ordered the restoration of the license over the Tsagaan Suvraga copper resource project located in Mongolia. Since that date the decision has been appealed and is expected to be heard by the Mongolian Courts during the September quarter.
The license was in dispute with the Mining Cadastre Department of the Government of Mongolia with regard to the status of the exploration license covering the Tsagaan Suvraga copper/gold deposit.
While the Directors consider the Tsagaan Suvraga copper exploration license to be a non-core asset of Molopo, the Company is intent on pursuing all reasonable avenues to preserve its security of title.
FINANCING
There was no financing activity in the quarter to June 30, 2000.
CORPORATE
ROYALTY
Molopo received a royalty payment of $17,628.29 from Alkane Exploration NL in respect of 7,051 ounces of gold produced from the Peak Hill Gold Mine in the June 2000 quarter.
OVERVIEW - JUNE QUARTER:
PROJECT FUNDING
GOONDICUM CRATER ILMENITE AND TITANO-MAGNETITE PROJECT
MARKETING
HIGHLIGHTS - JUNE QUARTER:
Batchelor Magnesium Project
It is the Company's present intention to commence operations on the high grade core zone which is all classified as Indicated. This material is expected to be sufficient to sustain production for the short to medium term. This high quality resource is expected to have an attractive waste to ore ratio.
During the quarter the Company has progressed discussion with various Northern Territory government agencies and other relevant groups including representatives of the two Timor Sea gas consortiums. Energy requirements have been discussed with the NT Power and Water Authority and Department of Minerals and Energy and further discussions are planned. The Company is optimistic that competitive energy costs will be achieved. The Company is also continuing an ongoing dialogue with the NT Department of Asian Relations and Trade regarding strategies for marketing magnesium metal product into Asia.
In conjunction with Multiplex the Company has carried out and refined its internal cost estimates for the Batchelor Magnesium Project. The Company remains firmly convinced that continuous metallothermic magnesium production technology, like Heggie, will revolutionise the magnesium metal industry over the next several years due to the lower capital requirements and comparable operating costs. It is expected that continuous metallothermic processes will be the way of the future. Preliminary economic models constructed by the Company show the Batchelor Project to sit in the lower half of the lowest quartile of worldwide production costs.
Negotiations have commenced with earthmoving contractors regarding mining of a bulk sample for metallurgical testing purposes prior to the end of the present dry season.
HIGHLIGHTS
- 110% increase in heavy mineral resources to 1.47 million tonnes at a 20% overall higher average heavy mineral grade.
- Inferred and indicated resources at 30 June 2000 total 43.9 million tonnes @ 3.35%HM (March quarter 25 million tonnes @ 2.8%HM).
- New high grade strandlines identified, on which the potential resource has not yet been fully delineated as at 30 June.
- Positive test results on chrome reduction in Ilmenite product and separation & recoveries of the valuable heavy minerals.
HIGHLIGHTS - JUNE QUARTER:
Drilling of Puffin 5 with AC/P22 provided Norwest Energy with its first hydrocarbon discovery. Forthcoming activities have the potential to generate significant value for the company.
Progress Report of PL44 Merivale 10-
Merivale No. 10 a gas appraisal well situated approximately 690 metres south-south-east of Merivale No. 8, latitude 25 deg. 33 min. 38.85 sec. south, longitude 148 deg. 20 min. 13.68 sec. east, was spudded at 23:30 hours on July 10, 2000. Surface casing was set at 250.1 metres .R.T. at 06:00 hours today the rig was preparing the well to run the intermediate casing. Progress for the week was 500 metres.
The primary targets of the well are the Aldebaran, staircase and reids dome sandstones.
HIGHLIGHTS - JUNE QUARTER:
HIGHLIGHTS - JUNE QUARTER:
JUNE QUARTER: HIGHLIGHTS
JUNE QUARTER:
TARNAGULLA GOLD PROJECT
The Crystal Hill Decline has been placed on 'Care and Maintenance' following the completion of mining of the Nick O' Time Shoot. Reef Mining N.L. have contracted Ironbark Mining Pty Ltd to complete this work.
The Wattle Gully Treatment Plant dry hire arrangement with Duketon Goldfields Ltd was terminated at the end of May, following cleanup and preparations for the plant to be left in the condition agreed with Duketon Goldfields Ltd.
The Tarnagulla Goldfield remains highly prospective and under-explored.
Reef Mining NL has conducted a comprehensive exploration program since 1994 on its core titles involving mapping, geochemistry, ground and airborne geophysics and drilling.
The detailed airborne magnetics and radiometric survey (50m flight height and 50m line spacing) formed the basis for the first detailed structural geological map of the Tarnagulla Goldfield. This survey revealed that the Poverty Line of Reef is located in a synclinorium between on echelon anticlinorial domes. The torsional stress regime is reflected in the geology down to mine scale.
There are three major 'lines of reef' in the Tarnagulla Goldfield, The Great Western, Poverty and Growlers lines. Reef Mining NL has drilled the Poverty-Line-of-Reef, along strike from the Poverty Reef itself, at a reconnaissance level to shallow depths. Limited work has been done on the Great Western Line and Growlers Line.
Where reconnaissance drilling has discovered significant mineralisation, follow up drilling at 50 metres spacing has been recommended. This would be sufficiently detailed to define resources in the Inferred category.
JUNE QUARTER: HIGHLIGHTS
Exploration
Corporate
Overview:
Rimfire is continuing its comprehensive evaluation of diamond indicator mineral results from its Peel Fault project in north western New South Wales. The project now covers greater than 1400sqkm of granted tenements highly prospective for diamonds.
The company's Fifield tenements (nickel, cobalt, platinum) in central NSW is in joint venture with Black Range Minerals NL, the developers of the Syerston lateritic nickel cobalt platinum deposits on the adjoining tenement.
Weekly Acitivity Update
1. DRILLING OPERATIONS
Saltfleetby-5 (ROC: 100%)
As of 6 pm on 27 July (UK time) the Saltfleetby-5 well had reached a depth of 1,538 metres (1,520 metres TVD) in the Roxby Formation and a wiper trip was underway in preparation for running 9 5/8" casing. The 3,200 metre well, including, if warranted, a 300 metre horizontal section, is designed to test the gas potential of the Namurian which underlies the field's main Westphalian reservoir and which has not been tested to date.
The Kyle Northeast Appraisal Well (ROC: 12.5%)
As of 6 pm on 27 July (UK time) the Kyle 29/2C-13 appraisal well (otherwise known as the Kyle Northeast well) had reached a depth of
1,219 metres (1,142 metres TVD) and was drilling ahead in 17 1/2" hole through claystone. The immediate forward plan for the well is to drill to 13 3/8" casing point at 1,387 metres while building hole angle to 50(deg).
2. PRODUCTION TESTING
Keddington-2 (ROC 100%)
During the week preparations continued for the installation of a pump at Keddington-2 with the expectation that the pump would be in place by next week.
Kyle Extended Well Test (EWT) (ROC: 12.5%)
This EWT continues to perform very satisfactorily with the operator varying production rates in order to gain a better understanding of the nature of the reservoir and to ensure that gas and oil production from the EWT remains within the guidelines defined by the UK Department of Trade and Industry (DTI).
3. AWARD OF NEW EXPLORATION LICENSES, ONSHORE UK (ROC: 100%)
ROC's wholly owned subsidiary, Roc Oil (UK) Limited, has been advised by the DTI that its applications for PEDL 075 and PEDL 076, offered as part of the Ninth Round of Landward Petroleum Licensing in the UK, have been successful. The initial term of both areas will be six years with a collective mandatory work program which requires the Company to purchase 56 km of existing 2D seismic data and acquire 50 km of new 2D seismic within the first two or three years. Both areas are close to PEDL 005 which contains the Saltfleetby and Keddington fields.
JUNE QUARTER: HIGHLIGHTS
Cash at bank and on deposit as at 30 June 2000 amounted to $3.2 million.
NSW SAPPHIRE OPERATIONS
(a) Australian Sapphire Joint Venture (50% Interest)
The Australian Sapphire Joint Venture is comprised of Sapphire Mines N L 50% and GTN Resources Ltd 50% and was formed to explore and develop the extensive sapphire resource areas, which both companies hold in the New England Region of New South Wales. The Joint Venture holds tenements totalling approximately 900 square kilometers, covering the majority of the prospective sapphire exploration areas in NSW.
GTN is the manager of the joint venture, with responsibility for exploration, mining and marketing.
Activity during the quarter includes:
WEEAN PROJECT - INVERELL NSW
Exploration continued on the Weean Project during the quarter with 100 holes drilled. Results from this drilling programme are currently being assessed, early indications being that they will substantially increase reserves. The existing measured and indicated resource at Weean is 113,000 bcm grading 46 grams/bcm. Development planning is underway.
During the quarter an environmental impact statement was completed and submitted to the local shire council, a requirement for the granting of development consent.
It is anticipated that consent will be granted in August enabling production at Weean to commence during the December quarter.
ROSE HILL PROJECT - GLEN INNES NSW
Trial mining continued during the quarter under the control and the cost of a mining contractor. While grades to date remain disappointing mining will continue during the coming quarter.
JOINT VENTURE TENEMENTS
During the quarter the restructuring of the ASJV Exploration Licences was completed and submitted to the NSW Department of Mineral Resources. The new structure which includes the relinquishment of ground deemed to be non-prospective will replace 16 current licences and licence applications with 3 new exploration licences. This will greatly simplify management, exploration and reporting and reduce costs for the joint venture.
JUNE QUARTER: HIGHLIGHTS
JUNE QUARTER: HIGHLIGHTS
ABSORBENT MINERAL OPERATIONS
ENVIRONMENTAL TECHNOLOGY AND AGRICULTURAL PRODUCTS
CORPORATE
FINANCIAL (unaudited figures)
OUTLOOK
JUNE QUARTER: HIGHLIGHTS
JUNE QUARTER: HIGHLIGHTS
HIGHLIGHTS - JUNE QUARTER:
JUNE QUARTER: OVERVIEW
The Company continued to work towards a rationalisation of its projects during the quarter and to seek business opportunities to compliment its existing mining business.
TUCKABIANNA
(Westgold 100%)
TUCKABIANNA SALE
An agreement to sell the Tuckabianna project tenements to Big Bell Gold Operations Pty Ltd (a wholly owned subsidiary of New Hampton Goldfields Limited) was reached at the end of the quarter.
Under The terms of the agreement Westgold will pay $300,000 and transfer the 13 tenements to New Hampton. In return, New Hampton will lodge replacement Environmental Performance Bonds to the amount of $1,005,000 and take over full responsibility for the environmental liability. PPK Environment and Infrastructure Pty Ltd have independently assessed the environmental liability to not exceed $820,000.
Subsequent to the end of the quarter the agreement received ministerial approval.
ENVIRONMENTAL
The WADME review of the Tuckabianna bonds was completed during the quarter. A reduction in bonds of approximately $66,000 was achieved. This amount would have been significantly higher if not for the application of a number of bonds on previously unfettered infrastructure, such as the airstrip.
Environmental rehabilitation work has been restricted pending the above sale. New Hampton will now assume full environmental liability on completion of the agreement.
JUNE QUARTER: GENERAL
With East Lost Hills gas production planned for December this year, two wells currently being drilled and a third likely to commence within two months, Xenolith's management is quietly confident of continued exploration success, coupled with increasing long term production capability. Of particular interest will be the results of the Berkley #3 well, as informal estimates place the structure being targeted at nearly twice the size of the structural complex penetrated at East Lost Hills.
JUNE QUARTER: HIGHLIGHTS
JUNE QUARTER: HIGHLIGHTS - MINING PROJECTS
NICKEL PROJECTS - WA
MULGARRIE (Yardarino 39.2%, Croesus 9.8%, Abador 51%, Billiton/QNI earning 65%)
Work during the quarter focussed on completion of the electromagnetic surveys and drilling of three of the most intense EM anomalies by RC percussion drilling.
The RC drilling (4 inclined holes, each between 156m and 200 deep) intersected zones of weakly disseminated iron sulphides with some narrower intersections of massive iron sulphides. The host rocks were basalt, pyroxenite and intercalated carbonaceous shales. No olivine rich rocks or nickel sulphides were intersected in these holes.
Petrological examinations were made of drill chips from these holes and from RAB hole MGRB 041A drilled in late 1999.
The petrological results for MGRB 041A indicated an olivine mesocumulate with traces of copper sulphide (chalcopyrite) and iron sulphide (pyrrhotite).
Despite a lack of elevated nickel and copper values from assay analyses, the presence of olivine mesocumulates is considered significant especially as MRB 0410A occurs close to an untested, subtle electromagnetic conductor. Follow up work is being planned.
COPPER / GOLD PROJECTS - SA
BROWNLOW (Yardarino 100%, Normandy earning 75%)
Under the terms of the Farmout Agreement, Normandy is required to expend $700,000 over three years to earn 75% equity in the project which forms part of Normandy's Padthaway Project where the main focus of exploration is on large style copper / gold mineralisation within basement rocks that are obscured by recent sediments of the Murray Basin.
No work was conducted over the quarter however during the next month Normandy will be selecting a range of samples from the Brownlow drill core for whole rock analysis in order to obtain information ideas on the relative prospectivity of the variety of intrusives intersected. Further work will also be done to assess the economic significance of the skarn alteration previously intersected in PADD009.
MINERAL SANDS PROJECT - VICTORIA
MURRAY BASIN - ECHO (Yardarino 10%, Basin 90%)
The Echo mineral sands deposit in EL 4323 forms an integral part of the continuing Pre-feasibility Study being carried out by Craton Resources NL on their Douglas Mineral Sand Project situated southwest of Horsham in the West Wimmera region of Victoria. The study is due for completion in late September 2000. During the quarter Yardarino carried out a full review of the latest metallurgical results of testwork to date following which decided to take a 10% fee carried interest to completion of a final mining feasibility on the deposit.
MINERAL SANDS PROJECTS - WA
TUTUNUP-SLEE ROAD (Yardarino 100%)
During the quarter drilling carried out intersected valuable heavy mineral within the Slee deposit, however it failed to delineate any deposit large enough to be of stand alone economic significance.
GOLD PROJECTS - WA
No work was carried out during the quarter.
HIGHLIGHTS
Company results for the quarter
Regional operating results for the quarter
SOUTH AFRICA
AFRICA
NORTH AMERICA
SOUTH AMERICA
AUSTRALASIA
Growth and market development
Company results for the half year
Amity Oil International Pty Ltd, a subsidiary of Amity Oil NL, signed a Memorandum of Understanding with the Turkish Petroleum Corporation (TPAO) in April 2000 to jointly study exploration data from several areas in the Thrace Basin of onshore western Turkey, with the objective of proceeding to a joint gas exploration drilling programme. The State owned TPAO, is the largest producer of oil and gas in Turkey and maintains world class exploration and development groups with in-house drilling, seismic and research capability. The Thrace basin is a Tertiary age basin, located mostly onshore between Greece and the city of Istanbul and is Turkey's largest producing gas province.
The joint study has now been completed and the parties have negotiated, (but not yet signed) a joint venture agreement to exchange equity in their 100% owned adjoining Exploration Licences and initially drill two wells on attractive targets on the combined area. Under the agreement, Amity and TPAO will each have a 50% interest in the combined area and fund the wells equally. Signing of the agreement is subject to final approval by the Board of TPAO.
AuIron retained consultants Hellman & Schofield Pty Ltd. ("H&S") to technically review drilling and field and laboratory sampling methodologies on two iron ore deposits located in the Hawk’s Nest area, 115 km southeast of Coober Pedy, on behalf of its 90% owned subsidiary SASE Pty Ltd.
Drilling was between March and May this year and the objective of the programme was to confirm sufficient iron ore feedstock to support the construction and operation for the SASE commercial pig iron project. A total of 14,900 m of drilling was completed by AuIron in 108 drillholes to an average depth of 150 m.
H&S’s preliminary estimate for the Kestrel deposit, based upon 17 diamond and 90 reverse circulation drillholes (total drilled by MESA and AuIron), is 220 Mt at an average grade of 36% total Fe at a 30% total Fe cutoff grade. This estimated open pittable resource extends to 135 m below surface with a density being calculated based on Fe grade. Drilling was carried out on at 50 m centres on 100 m spaced north-south lines along a strike length of 1.6 km. The magnetite BIF resource is open along strike, both to the east and west and at depth.
H&S’s preliminary estimate for the Buzzard deposit, at 55% total Fe cutoff, contains 7.2 Mt at an average grade of 60% total Fe. The resource estimate is based on results from 5 diamond and 39 reverse circulation drillholes generally 30 m apart on 60 m spaced lines. The resource extends to 125 m below surface.
1) LADY LORETTA
(100% owned, but Noranda Pacific holds an option to acquire 75% interest)
Noranda Pacific Pty Ltd (as manager of the exploration and assessment program) has reported that the focus of work during the early part of the June quarter was on completion of the revised mineral resource estimate. This was compiled subsequent to the completion of the year 2000 in fill drilling within the mineralised zones.
The new mineral resource estimate is 13,600,000 tonnes at 17.1% zinc, 5.9% lead and 97gt silver. This was announced to the market on 6 June 2000.
Noranda also elected to commence a Feasibility Study of the Lady Loretta deposit in advance of its decision as to whether it acquires a 75% interest in Lady Loretta.
The feasibility study commenced in June after Noranda selected its preferred engineering consultants and sub consultants. This study will be comprehensive, covering all aspects of geology, mining, metallurgy, site infrastructure and logistics. To this end, drilling for metallurgical sample was ongoing, in order to generate a 27 tonne bulk sample for pilot plant testwork at Lakefield Research, Canada. This bulk sample will be tested in the September quarter, with the objective of gaining information for optimising various design parameters for a concentrator.
The feasibility study will, of course, also address all important issues surrounding the environment, health and safety. Liaison with indigenous peoples continues.
Under the terms of the Lady Loretta Joint Venture Option Deed, Noranda holds an option to purchase a 75% interest in Lady Loretta for $21m, by December 2000. Should Noranda exercise this option, Buka would retain 25% of this deposit.
2) LADY ANNIE
(100% owned, but Noranda Pacific holds an option to acquire 75% interest.)
Noranda was less active on Lady Annie during the quarter and is close to finalising its report on Lady Annie. The initial assessment of the data base showed limited potential for any substantial increase in the oxide reserves. Nonetheless, a substantial deposit of oxidised copper mineralisation is present at Lady Annie. The March quarter metallurgical work demonstrated that favorable responses to conventional acid leach may be expected.
From its work, Noranda has inferred the potential for a deeper primary copper sulphide body, on a different orientation to that previously interpreted. This holds some promise for size at Lady Annie.
Buka continues to hold the view that Lady Annie represents a substantial copper deposit, however it may not meet Noranda's size criteria. Should Noranda not exercise its option to acquire Lady Annie, Buka is confident that other development options can be successfully pursued.
Fourth Quarter Activities
The oil shale value of the Company greatly depends on the success of the first modern oil shale plant in Australia, namely the Stuart Stage 1.
Recent short term runs of the plant showed promising results.
In the past few months substantial progress appears to have been made to the point where Southern Pacific Petroleum are hopeful that by year end it will be producing reliable oil in its massive Stuart deposit in Gladstone, Queensland.
Stuart is the showpiece for Southern Pacific Petroleum and will ultimately produce 65,000 barrels per day of crude oil products.
There is a potential for very substantial future oil shale operations at Nagoorin/Nagoorin South. A total exploitation of Nagoorin and Nagoorin South would be expected to be at least the scale of the projected Stage 3 at Stuart. (Nagoorin has 2.65 billion barrels which is joint ventured with Greenvale Mining NL 25%, SPP 25% and CPP 25%. Nagoorin South has 0.47 billion barrels which is wholly owned by SPP and CPP).
CLEAR BRANCH FIELD, JACKSON PARISH, NORTH LOUISIANA
Encouraging gas shows have been reported while drilling the Hosston sand series in the Terry Ewing No 1 well. Fifty (50) feet of gross sand was drilled in the "Orange" sand with excellent drilling breaks and increased background gas readings over the interval from 9,790 to 9,840 feet.
Further drilling breaks and increased background gas readings were also recorded in the "Yellow" sand in the interval from 9,904 to 9,912 feet and from 9,922 to 9,944 feet. A drilling break was also recorded in the interval from 10,280 to 10,302 feet in the "Green" sand. Both the Orange and Yellow sands are gas productive elsewhere in the field.
MIKESKA-HAMILL FIELD PROSPECT, AUSTIN COUNTY, TEXAS
The third well in the year 2000 program, the Schulz-1 well is preparing to plug and abandon after failing to encounter commercial hydrocarbons. The well was drilled to a total depth of 8,662 feet.
Operator of the Maui BD Oil project, Shell Todd Oil Services, recommended that the Maui Joint Venture cancel plans to drill and complete a horizontal well from the MB-7 location. Fletcher Challenge Energy has accepted this recommendation.
Although the MB-7 horizontal well was drilled into the target zone, the lower section of the well has become unserviceable following the loss of a 520 metre drilling assembly within the horizontal well section.
FLETCHER CHALLENGE
DRILLING & PRODUCTION TESTING REPORT
FOR THE WEEK ENDING 26/07/2000
Country : Canada
Block Area: Hatton
or Prospect
Well Name : 16-17-15-27 W3M
or Location
Objective : A Development well testing Milk River / Medicine Hat Gas.
Current Status : * Spud 22/07/2000
* Cased for MR/MH Gas
* Rig Released: 23/07/2000
Block Area: Hatton
or Prospect
Well Name : 12-35-14-26 W3M
or Location
Objective : A Development well testing Milk River / Medicine Hat Gas
Current Status : * Spud: 23/07/2000
* Cased for MR/MH Gas
* Rig Released: 24/07/2000
Block Area: Hatton
or Prospect
Well Name : 10-20-14-26 W3M
or Location
Objective : A Development well treating Milk River / Medicine Hat Gas
Current Status : * Spud: 20/07/2000
* Cased for MR/MH Gas
* Rig Released: 22/07/2000
Block Area: Disko Bay
or Prospect
Well Name : 7-3-49-7 W5M
or Location
Objective : An Exploration well testing Glauconite Gas
Current Status : * Spud: 23 Jul 2000
Block Area: Hatton
or Prospect
Well Name : 12-8-17-26 W3M
or Location
Objective : A Development well testing Milk River Gas
Current Status : * Spud: 24/07/2000
* Cased for MR Gas
* Rig Released: 25/07/2000
Block Area: Hatton
or Prospect
Well Name : 4-8-17-26 W3M
or Location
Objective : A Development well testing Milk River Gas
Current Status : * Spud: 23/07/2000
* Cased for MR Gas
* Rig Released: 24/07/2000
Block Area: Hatton
or Prospect
Well Name : 3-4-15-27 W3M
or Location
Objective : A Development well testing Milk River Gas/ Medicine Hat Gas
Current Status : * Spud: 24/07/2000
* Cased for MR/MH Gas
* Rig Released: 25/07/2000
Block Area: Hatton
or Prospect
Well Name : 2-19-14-26 W3M
or Location
Objective : A Development well testing Milk River / Medicine Hat Gas
Current Status : * Spud: 24/07/2000
* Cased for MR/MH Gas
* Rig Released: 25/07/2000
FLETCHER CHALLENGE
DRILLING & PRODUCTION TESTING REPORT
FOR THE WEEK ENDING 26/07/2000
Country : New Zealand
Block Area: PML381012
or Prospect
Well Name : MB-7
or Location
Objective : Horizontal development well in the Maui B D1.10 oil reservoir
Current Status : * Unsuccessfully fished for stuck drilling pipe and BHA
* Plugged back to 9(5/8)" casing
* Current operation @ 0600hrs 27th July, preparing to sidetrack
Block Area: PML381012
or Prospect
Well Name : MB-6
or Location
Objective : Horizontal development well in the Maui B D1.10 oil reservoir
Current Status : * Suspended well with stuck 4(1/2)" liner pending evaluation of sidetrack or completion options while operations proceed on MB-7
Country : Canada
Block Area: Hatton
or Prospect
Well Name : 16-17-14-26 W3M
or Location
Objective : A Development well testing Milk River/Medicine Hat Gas
Current Status : * Spud 19/07/2000
* Cased for MR/MH Gas
* Rig Released 19/07/2000
Block Area: Hatton
or Prospect
Well Name : 4-17-15-27 W3M
or Location
Objective : A Development well testing Milk River/Medicine Hat Gas
Current Status : * Spud 17/07/2000
* Cased for MR/MH Gas
* Rig Released 19/07/2000
Block Area: Hatton
or Prospect
Well Name : 10-20-14-26 W3M
or Location
Objective : A Development well testing Milk River/Medicine HatvGas
Current Status : * Spud 20/07/2000
* Cased for MR/MH Gas
* Rig Released 22/07/2000
Block Area: Hatton
or Prospect
Well Name : 2-8-17-26 W3M
or Location
Objective : A Development well testing Milk River/Medicine Hat Gas
Current Status : * Spud 19/07/2000
* Cased for MR/MH Gas
* Rig Released 20/07/2000
Block Area: Hatton
or Prospect
Well Name : 10-8-17-26 W3M
or Location
Objective : A Development well testing Milk River Gas
Current Status : * Spud 20/07/2000
* Cased for Milk River Gas
* Rig Released 21/07/2000
Block Area: Hatton
or Prospect
Well Name : 2-17-17-26 W3M
or Location
Objective : A Development well testing Milk River Gas
Current Status : * Spud 21/07/2000
* Cased for Milk River Gas
* Rig Released 22/07/2000
Block Area: Hatton
or Prospect
Well Name : 4-17-17-26 W3M
or Location
Objective : A Development well testing Milk River Gas
Current Status : * Spud 22/07/2000
* Cased for Milk River Gas
* Rig Released 23/07/2000
Block Area: Hatton
or Prospect
Well Name : 16-8-15-27 W3M
or Location
Objective : A Development well testing Milk River/ Medicine Hat Gas
Current Status : * Spud 23/07/2000
* Cased for MR/MH Gas
* Rig Released 24/07/2000
KEY POINTS
* Excellent zinc/lead results obtained from drilling at Dairi Project
* Resource calculation for the high grade Empress mineralisation
being calculated
* Major part of rehabilitation completed at Three Mile Hill
Fourth Quarter Activities
NEW BOARD MEMBER
Lawrence Simon Buchwald, Managing Director of Smart Silicon Systems
Pty Ltd shall join the Board of Julia Corporation Limited in
September. Simon will bring a wealth of Information Technology
experience to our dominantly Mining orientated Board.
EXPLORATION
DINGO RANGE JOINT VENTURE, WA
(Julia 50% Manager, Gawler Gold and Mineral Exploration NL
("Gawler") 50%)
An aggressive exploration campaign continued during the quarter at
the Dingo Range Project in the Eastern Goldfields of WA. This work
included a substantial component of drilling as shown below:-
* 14 Reverse Circulation Drill holes for 2,207m
* 3 Diamond Tails for 354m
* 94 Aircore Drill holes for 5,292m
* 39 Rotary Air Blast Drill holes for 1,243m
* 165 Lag gochemical samples
BOUNDARY RESOURCE
A further 14 RC Drill holes and three diamond tails were completed at
the Boundary Resource. This work continued to test the eastern BIF
extensions to the resource as well as provide important geological
data. Results have confirmed gold mineralisation is present in the
eastern BIF unit for at least 250 metres of strike length and remains
open to the north.
This area is partially covered by gravel deposits which had
previously obscured the mineralisation in the upper regolith. The BIF
contains wide low grade envelopes between 0.2 - 0.5g/t gold over a
true width of between 20-30 metres. Higher grade intercepts are
contained within this envelope that are typically 2.0 - 2.5g/t. A
full list of RC and diamond drill results is contained in Table 1
below.
HIGHLIGHTS
METALLURGICAL - YOUNG
Five bulk samples each of 100kg taken from stored drill-sample to
assess the metallurgical characteristics of the various resources.
The work has already commenced and should be completed by
September 2000.
SCANDIUM RESOURCES (YOUNG - LAKE INNES NSW)
Jervois enters high tech age in collaboration with CSIRO
FOREST REEFS - GOLD/COPPER - JOINT VENTURE NEWCREST
Newcrest reports some interesting exploration results for gold at
Forest Reefs, near Cadia.
NORTH PERTH BASIN - OIL/GAS - EP111
A private investor is considering completion of a well (Jago No 1).
Recent near record oil prices in Australian dollar terms a factor.
MT MOSS
A group interested in exploiting the magnetite resource could
generate cash flow for the Company in 2001.
CAPITAL RAISING - WORKING CAPITAL
The Company has placed 8 million shares and 8 million options at
4 cents with clients of Johnson Taylor Corporate Ltd to raise
$320,000 for a fee of 8%.
HIGHLIGHTS
* Significant improvement in profit before abnormal items and tax to
US$14.4m in the first half, compared with a loss of US$9.7m during
the corresponding previous period.
* Charges for operating costs were down by US$5.5m.
* Total cash costs for the second quarter fell to US$235/oz. compared
with US$250/oz. for the first quarter.
* Mining contract with Thiess-Roche discontinued on 17 April with
expected mining cost reduction from US$1.94/tonne to US$1.45/tonne.
* Production of 141,551 ounces in the second quarter.
* New ore reserve statement was released on 28 June reflecting a 21%
increase to 13.4 million ounces.
* As foreshadowed in the ore reserve release, an impairment provision
of US$231m pre-tax (US$150m post tax) has been incorporated as an
abnormal item in the profit and loss account in compliance with
International Accounting Standard IAS 36.
* Hedge book represents just 16% of reserves and 33% of the next 12
years' production.
LETTER TO SHAREHOLDERS - North Seaspray No. 3 Well
North Seaspray No. 3 well was commenced on May 28, 2000 and reached its target depth of 1,170 metres on June 19, 2000. A gas flow of 150,000 cubic feet a day was recorded at surface. Although this flow is not commercial, it is however the first measured gas recorded onshore in the Gippsland Basin, and it certainly has some most important ramifications for Lakes Oil, which now effectively controls the majority of the onshore portion of the Basin.
They have now worked-up a new "geological model" which may explain the situation onshore in the Seaspray area. The model proposes that, below the meandering river channels encountered in North Seaspray No. 2 and No. 3, is an alluvial fan. This shedding by the river channels of materials from the Great Dividing Range occurred many millions of years ago after which they were subsequently covered by the Latrobe Sands and coal measures.
RAWAS - INDONESIA (COW2)
A 10 hole diamond drilling programme was completed to depth test
continuity of surface veins in the Upper Minak area of COW2. Three
targets were tested. being Hanafi, Baku Puhih and Fossil-Minak.
Results are given in Table 1.
Significant intersection were:
UMD-001 1.0m @ 1.25 g/t Au equ from 13.0m.
UMD-00.1 2.0m @ 2.08 g/t Au equ from 18.0m
UDM-005 1.0m @ 1.27 g/t Au equ from 136.0m.
UMD-005 0.3m @ 2.62 g/t Au equ from 76m.
UMD-006 1.6m @ 1.56 g/t Au equ from 44m.
(Table 1)
Whilst the drilling proved continuity of the veins from surface, the
grades did not persist.
The drill program has been suspended pending identification of
further targets.
Second Quarter Activities
WESTERN AUSTRALIA
Kalgoorlie Tenements (ML M26/495 and ML M26/496 - "Parkeston", and
ML M26/497 and ML M26/498 - "Corsair North". The tenements are
subject to joint ventures with Kalgoorlie Consolidated Gold Mines
(KCGM))
As previously advised, KCGM has elected to cease sole funding of both
the joint venture projects, and in accordance with the provisions of
the joint venture agreements, KCGM's equity reduces to 49%, and
Magnum Gold assumes management. Pursuant to discussions between the
parties, and as previously advised, KCGM has proposed a program of
exploration for the period to June 30, 2000 for the Parkeston
project. Magnum Gold has formally approved this program, but has
elected not to contribute. No report has yet been received from KCGM
in relation to this work which will be reported in the forthcoming
quarter.
Despite notification that it would be seeking to divest its remaining
49% equity in the Corsair North project, KCGM reviewed its position
during the reporting period, and elected to undertake limited
additional exploration on the two northern-most tenements (PL
26/1965-1966) in this project area. The remaining four tenements (PL
26/1967-1970) have been dropped from the joint venture and revert
100% to Magnum Gold. KCGM planned to have the additional work
completed by the end of June 2000, however as with the Parkeston
project, no report has yet been received, and these results will also
be reported in the next quarter.
SOUTH AUSTRALIA (Gawler Craton)
EL 2696 - Warrior Project (Application ELA 122199)
(Replacement for licence EL 2030. This licence is held by Websters
Find Gold Pty Limited, a wholly owned subsidiary of associated
company Carbon Minerals NL, and is subject to a joint venture
agreement with Magnum Gold NL)
Notification of compliance with the requirements of Part 9B of the SA
Mining Act (which relates to Native Title) has still not been
received, and as a consequence no work has been possible within this
tenement, during the quarter.
EL 2166 - Lyons Siding Project (Application ELA 426/95)
(This licence is subject to a joint venture agreement with Websters
Find Gold Pty Limited, a wholly owned subsidiary of associated
company, Carbon Minerals NL)
The application for a further 12 months extension of this tenement
has been granted, however as notification of compliance with the
requirements of Part 9B of the SA Mining Act (which relates to Native
Title) is still awaited, no resumption of exploration was possible
during the reporting period.
EL 2703 (ELA 146/99) "Warrior North" - 266 square kilometres
This covers an area immediately to the north of both EL 2166 and EL
2696 and consolidates Magnum Gold's tenement holding in this region.
The tenement was granted on March 2, 2000 for an initial term of one
year, but like other tenements in the region, commencement of
fieldwork requires compliance with Part 9B of the South Australian
Mining Act.
EL 2719 (ELA 145/99) "Hiltaba" - 907 square kilometres
This tenement, granted on April 27, 2000, lies approximately 120
kilometres northeast of Streaky Bay and covers an area in the Gawler
Ranges which includes contact zones of the Hiltaba Granite and Gawler
Range Volcanics. The structural setting of the area is considered to
offer potential for Olympic Dam style copper-gold mineralisation.
Once again, commencement of fieldwork requires compliance with Part
9B of the South Australian Mining Act.
Molopo Australia N.L.announces that it has successfully commissioned a gravity separation gold plant on the Changjin Alluvial Project in North Korea.
The plant comprises an inline pressure jig manufactured in Australia
and designed to treat 50 tonnes of material per hour. during
commissioning, the plant successfully processed between 55-65 tonnes
per hour.
Test production will continue over the current quarter to optimise
the circuit. After a consistent period of production, operating
statistics will be calculated and reported.
HIGHLIGHTS:
The principal activity during the quarter involved the sale of the company's 49 per cent interest in the White Foil Gold Deposit.
Reasons for the disposal of this interest have been previously advised to shareholders and their approval for this course of action was received at an Extraordinary General Meeting held on 23rd June, 2000.
Following a tender process where twelve companies participated, our company received an offer from a subsidiary of Goldfields Limited which was accepted as the highest tenderer. The tender offer of A$9 million is being processed through pre-conditions including a pre-emptive right held by the operator Mines & Resources Australia Pty Ltd - a subsidiary of the French Group Cogema. These pre-conditions are expected to be satisfied in a very short time frame.
The closure of the sale of this interest, despite the unpalatable background to this long saga, will allow the company to pursue other opportunities - principal of which is the advancement of the company's copper/gold interests near Mt Isa including the Trekelano deposit.
Whilst the primary focus of the company at the present time revolves around the resource industry, the company will consider investment in other activities that can bring benefit to shareholders and that are consistent with our risk/reward profile.
QUARTERLY REPORT FOR THE THREE MONTHS ENDING 30 JUNE 2000
KEY POINTS
Group production for the year was 998,615 oz of gold, up 40% and
29,806 tonnes of copper. The Total Cash Cost for the year was
$295/oz, down 14%.
Increasingly high costs at Telfer have necessitated suspension of
mining.
QUARTERLY OVERVIEW
PRODUCTION
* Gold production for the quarter was 254,860 oz at a Total Cash Cost
of $339/oz.
* Copper production for the quarter was 8,692t.
DEVELOPMENT
* Telfer SEP and ISP project evaluations continue uninterrupted.
* Trial mining at Ridgeway delivers first production.
* The new Boddington Extension Project (Wandoo) Resource is 730 Mt @
0.84 g/t Au and 0.11% Cu (Newcrest equity 22.2%).
EXPLORATION
* At Cadia Far East broad intersections include 290m @ 1.2g/t Au and
0.4% Cu and 1.52 m @ 1.lg/t Au and 0.44% Cu.
* At Cracow an inferred mineral resource for the Royal Shoot of
1.1Mt @ 11 g/t Au. (Newcrest equity 70% has been announced.
HEDGING & FINANCE
* At 30 June 2000 the hedge book comprised 7.0 million ounces. The
net mark-to-market value of the gold hedge book was negative $129.5M
and negative $49.2M for copper (unaudited).
* The Preliminary Final Statement for the year ending 30 June 2000 is
anticipated to be released on 22 August 2000.
CORPORATE
* A replacement is being sought for Mr Peter Smedley who resigned
from the Board on 28 June 2000.
SUBSEQUENT EVENTS
* Mr Russell Barwick commenced as Managing Director and Chief
Executive Officer on 26 July, 2000.
* The Board thanked Mr Bryan Davis for his valuable contribution as
MD and CEO in the period 3 April to 25 July.
SANTOS LIMITED - SUMMARY OF DRILLING
WEEK ENDING 27/07/2000
SOUTH AUSTRALIA
WELL: Meranji 20
TYPE: Gas Development
LOCATION: PPL 35. Merrimelia-Innamincka Block, 0.5km ESE of Meranji 4, 0.6 km NNE of Meranji 17, and some 30km NNW of the Moomba Gas Plant
STATUS AT 27/07/2000 0600 HOURS: Nippling down blowout preventers. Meranji 20 has been cased and suspended as a future Permian Gas producer.
The well reached a total depth of 2881m, with 782m progress for the week. The rig will be released today, and will move to Meranni 22.
PLANNED TOTAL DEPTH: 3010m
WELL: Moomba 114
TYPE: Gas Development
LOCATION: PPL 7, Moomba Block, 1.1km SE of Moomba 74, 1.0km NNE
of Moomba 71, and some 9km NW of the Moomba Gas Plant
STATUS AT 27/07/2000 0600 HOURS: Moomba 114 has been cased and suspended as a future Permian Gas producer. The well reached a total depth of 2766m, with no progress for the week. The rig was released on 22/07/00, and has moved to Moomba 115
PLANNED TOTAL DEPTH: 2759m
WELL: Moomba 115
TYPE: Gas Development
LOCATION: PPL 7, Moomba Block, 1.1km N of Moomba 90, 1.0km NW of
Moomba 6, and approximately 11km NW of the Moomba Gas
Plant
STATUS AT 27/07/2000 0600 HOURS: Running surface casing. The current depth and progress for the week is 920m. Moomba 115 was spudded on 25/07/00.
PLANNED TOTAL DEPTH: 2637m
WELL: Moomba 118DW
TYPE: Oil Development
LOCATION: PPL 7, Moomba Block, 0.3km ENE of Moomba 104, 0.7km
SSE of Moomba 24, and some 6km S of the Moomba Gas
Plant
STATUS AT 27/07/2000 0600 HOURS: Drilling ahead with steerable drilling assembly. Current measured depth is 2175m with 635m progress for the week.
Moomba 118 is a high grade oil development well designed to drain reserves from the Jurassic aged Hutton Sandstone oil pool, recently discovered by Moomba 104 oil exploration well.
PLANNED TOTAL DEPTH: 2414m
SANTOS LIMITED - SUMMARY OF DRILLING
WEEK ENDING 27/07/2000
OFFSHORE WESTERN AUSTRALIA
WELL: Stag 15H L2
TYPE: Oil Development
LOCATION: WA-15L, Barrow Basin, NW shelf, Offshore WA, 25km
SW of Wandoo, 64km NW of Dampier.
STATUS AT 27/07/2000 0600 HOURS: Drilling ahead at 2790m with 565m progress for the week. Stag 15H-L2 is a horizontal lateral in the M. australis oil reservior. The rig was skidded to Stag 15H-L2 on 18/07/2000.
PLANNED TOTAL DEPTH: 3400m
WELL: Webb 1
TYPE: Gas Exploration
LOCATION: Suemaur Moore Prospect, San Patricio Country, Texas.
STATUS AT 27/07/2000 0600 HOURS: Webb 1 has been plugged and abandoned. The well reached a total depth of 3852m with no progress for the week. The rig was released on 18/07/2000.
PLANNED TOTAL DEPTH: 4115m
WELL: State Tract 157#1
TYPE: Gas Exploration
LOCATION: South Long Reef Prospect, Aransas County, Texas
STATUS AT 27/07/2000 0600 HOURS: State Tract 157#1 has been cased and suspended as a potential future Oligocene gas producer. The well reached a total depth of 3967m, with no progress for the week. Subsequent well testing is programmed. The rig was released on 25/07/2000.
PLANNED TOTAL DEPTH: 3048m
REPORT FOR THE QUARTER ENDED 30 JUNE 2000
HIGHLIGHTS
* OIL REVENUE 62% HIGHER THAN SECOND QUARTER 1999: Oil revenue for
the quarter was US$42.3m, 62% higher than the US$26.1m received in
the second quarter of 1999. The average price received from the sale
of oil during the second quarter 2000 was US$25.94/barrel, compared
to US$25.01/barrel in the first quarter and US$16.14/barrel in the
second quarter of 1999.
* GOLD PRODUCTION FROM THE PORGERA GOLD MINE UP 3% ON FIRST QUARTER
AND 40% ABOVE SECOND QUARTER 1999: Orogen's share of quarterly gold
production from the Porgera Gold Mine was 42,427 ounces, 3% higher
than in the first quarter and 40% up on the 30,378 ounces produced in
the second quarter of 1999. Total unit cash costs were US$196 per oz.
* OIL PRODUCTION DOWN 5% ON FIRST QUARTER 2000, BUT 10% HIGHER THAN
SECOND QUARTER 1999: Orogen's share of oil production from the
Kutubu, Gobe and Central Moran Oil Fields was 5% lower than in the
first quarter but 10% higher than in the same quarter of last year.
Attributable production was 1,631,109 barrels of oil produced at an
average cash cost of US$4.87 per barrel.
* POSITIVE DEVELOPMENTS IN THE PNG-QLD GAS PROJECT DEVELOPMENT:
During the second quarter, an objective framework for a Go/No Go
decision on the Front End Engineering and Design (FEED) for the
PNG-QLD Gas Project was agreed, the Queensland Government announced
its Clean Energy Policy, and progress was made both on negotiating
the PNG Gas Agreement and resolving PNG infrastructure ownership
issues.
* PROGRESS TOWARDS FULL FIELD DEVELOPMENT OF CENTRAL MORAN OIL FIELD
DEVELOPMENT: The Moran-4 Extended Well Testing program commenced
during the quarter and a Petroleum Development Licence Application
over the PPL-138 portion of the Central Moran oil field was submitted
to the PNG Government.
* BOARD OF DIRECTORS AND SENIOR MANAGEMENT APPOINTMENTS: A number of
changes to Orogen's senior management and Board of Directors were
announced during the quarter as the Company prepares for the next
phase of its corporate development.
REPORT ON ACTIVITIES FOR THE QUARTER TO 30/06/2000'
ANNUAL PRODUCTION
* Annual production targets exceeded.
* Attributable production for the year increased by 50% to 361,802
ounces (1999: 241,543) whilst cash costs dropped by 8% to US$194/oz
(199: US$209).
* Total production for the year of 375,191 ounces (1999: 309,390) at
a cash cost of US$196/oz (1999: US$210).
* Annual production from Golden Pride was 225,289 ounces at a cash
cost of US$156/oz.
QUARTERLY PRODUCTION
* Total gold production of 100,309 (106,568) ounces of gold was
achieved during the June quarter at a cash cost of A$299 per ounce
(A$283/oz).
* Attributable production for the quarter was 96,528 (103,079)
ounces of gold at an average cash cost of A$297 per ounce (A$281/oz).
* Golden Pride achieved production of 62,497 ounces of gold (65,847)
at a cash cost of US$152 per ounce (US$144/oz).
* Production from Obotan increased by a further 8% to 37,812
(34,890) ounces of gold at a cash cost of US$219 per ounce
(US$204/oz).
EXPLORATION
CRUSH CREEK
* Project sold to Gold Fields for A$1.5m cash.
INDEE - DILUTING TO 49%
* A farm out agreement has been entered into with Normandy who can
spend $3m prior to 31 December 2002 to earn a 51% interest.
BURKINA FASO - 45-54%
* Drilling at Belahouro. Better results include:-
- 10m @ 7.2g/t
- 1m @ 163.8g/t
- 5m @ 7.5g/t
CORPORATE
* Gross cash flow generated from operations for the quarter of A$21
million (A$21m).
* At the end of the quarter Resolute and its subsidiaries cash and
bullion on hand increased by a further A$7 million to A$71 million
(A$64 million).
* This was achieved notwithstanding the early repayment in full of the
outstanding Obotan Debt facility (US$m).
* Debt levels reduced by A$9 million to A$66 million (A$75 million).
In addition Resolute has a residual exposure of A$8m in respect of the
Macquarie Bank Limited/Preston convertible note.
* Preference Dividend as at 30 June was not paid due to insufficiency
of distributable profits and reserves.
* The outlook for the next fiscal year is positive; both in respect of
production and profitability.
HIGHLIGHTS
* $4.2m capital raising.
* Commencement of the 2000 field season by Striker and the AEJV (Rio
and Ashton).
* Re-commencement of onsite processing of kimberlite from Ashmore
with preliminary diamond recovery.
* Predicted average value of diamonds from Ashmore 2 increased from
US$56/ct to US$66/ct.
* Promising results from 1999 RC drilling at Seppelt.
* Additional diamond recoveries by AEJV from five drainage sites
within the Joint Venture area along with the delineation of 2 high
priority anomalies, 20 and 3 hectares. In total, 77 alluvial
diamonds were reported.
As a matter of priority Summit is discussing funding and joint
venture proposals with several interested major mining companies to
commence drill testing a series of base metal targets on its Isa
North ground in northwest Queensland. Here, a corporate alliance
involving the placement of shares to initially fund drilling and a
subsequent joint venture is being discussed.
At Isa North, three primary targets are now ready for drill testing
which have the potential to host large, world class, base and
precious metal deposits.
* George Fisher North Pb Zn Ag
* Bonus Basin Cu
* Magnetic Anomalies Cu Au
SUMMIT'S PROJECT INCLUDES:
* Northern strike extension of MIM's George Fisher mine
* Exposed and drilled copper mineralisation in Bonus Basin
* Roxby Downs and Ernest Henry style magnetic anomalies
* Close proximity to world class base and precious metal deposits
* Large tonnage multi metal targets in Proterozoic rocks
* 1200km(2) tenement block
* Excellent access and only 40 kilometres north of Mount Isa city
* Granted tenements with no Native Title issues
* Drill targets ready to test
* Advanced cost effective exploration program
Using Summit's existing Mount Isa exploration base, expertise and
experience in the area drilling is planned to commence as soon as a
funded proposal is in place.
EXPLORATION REPORT JUNE QUARTER 2000
1. ISA NORTH (QLD)
Interest: Summit Resources (Aust) Pty Ltd 50%
Operator: Summit Resources (Aust) Pty Ltd
Summit's recent mapping and compilation of the database at Isa North
has defined a series of base metal targets in its ground. The data
has revealed tens of kilometres of the northern strike extension of
the mine sequence rocks which host the Mount Isa ore bodies and the
structurally controlling adjacent Mount Isa and Parco Fault system in
its ground.
SUMMARY
* Reworking of seismic and drilling data previously acquired by
Santos and partners continued with the following results:
- NEW PROSPECT-UPDIP FROM PACKSADDLE 2; STUART 100%
Two sands in the Merrimelia Formation in Packsaddle 2 now appear
to be oil saturated. A test, which straddled these sands, is
thought to have been ineffective as a consequence of high mud
weight.
- NEW PLAY - CADNA-OWIE FORMATION; STUART 100%
A regional review of available data in the area has indicated
the possibility of gas accumulation in the Cadna-owie Formation
in the Packsaddle Block.
* Plans to drill Acrasia No 1 after completion of native title
negotiations and the grant of relevant petroleum exploration licence
in the Paning Block are well advanced following discussions with
Supply Contractors and the Office of Minerals and Energy Resources.
* Negotiations with Native Title Claimants in respect of Blocks C098E
and C098H are proceeding. The Company is making every effort to bring
about an early conclusion to the negotiations on acceptable terms.
Fourth Quarter Activities
ZIMPLATS SHARE PRICES AND VOLUMES
4.9 million Zimplats shares were traded during the quarter
representing 5.5% of the issued share capital of the company. The
share price declined during the quarter and it is assumed that this
decline resulted from the widely reported political tensions in
Zimbabwe during the run-up to the parliamentary elections held on the
24th and 25th June 2000.
MANAGEMENT AND BOARD APPOINTMENTS
Mr Roy Pitchford took up his appointment as Managing Director on the
1 May 2000. He will be resident in Zimbabwe and brings to Zimplats a
wealth of very valuable commercial and mining experience, including
specific experience of platinum exploration and mining on the Great
Dyke at the Hartley Platinum Mine and on Zimplats' Ngezi, Mhondoro
and Selous projects, formerly owned by Delta Gold Limited.
EXPENDITURE
Expenditure for the quarter ended 30th June 2000 was US$1.16 million
mostly incurred on work with the development planning associated with
the Ngezi/SMC Project.
At the end of June 2000, Zimplats' cash on hand was US$1.04 million.
Zimplats is in the process of finalising arrangements for a financing
facility to ensure that all non-project related costs are capable of
being met for the ensuing twelve-month period.
HIGHLIGHTS FOR THE QUARTER
FOR THE PERIOD ENDED 30 JUNE 2000
US OPERATIONS
Gross revenue derived from oil and gas production was up US$274,094 to US$1,582,714 representing an increase of 20.9% from the last quarter.
The West Texas Intermediate posted oil price remained steady during the period. Hedging contracts with Norwest Bank Minnesota, NA in two tiers each based on 5,000 barrels per month were in effect during the period. Total hedge costs for the quarter amounted to US$431,421. New hedges were entered into on 4 May, 2000 for the 12 months commencing January 2001, based on 10,000 barrels per month.
DISPOSALS
There were no disposals during the quarter.
ACQUISITIONS
During the quarter, the company announced that the transaction to acquire the oil-producing assets from Remington Oil would not proceed, due to irregularities found during the due diligence review.
PRODUCTION AND SALES
Production for the quarter was derived from the Company's:
* 85.5% working interest in the Sunday Corporation leases located in Archer and Young Counties, Texas.
* 78.8% working interest in the Knox City unit.
* 85.5% working interest in the Clay County unit.
* 85.5% working interest in the Mobil-Arco Lease located in Gaines County, Texas.
* 76.25% working interest in the Wylie Lease located in Cottle County, Texas
* 90.25% working interest in the LCS Production Leases.
Quarterly Report for the Period Ended 30 June 2000
HIGHLIGHTS
QUARTERLY REPORT FOR THE PERIOD ENDED 30 June 2000
HIGHLIGHTS
* Syerston project feasibility successfully completed
* NPV(10) indicated at over $500 million or $2.50 per BLR share
* Joint Venture formation process under way
* Debt funding under way
* EPCM contract bidding under way
* Platinum recovery rate confirmed at 60%
* BLR disposing of non-core assets
* CIBC continues to support the Syerston project
Second Quarter Activities Report
MARKET CAPITALISATION AT 30 JUNE 2000
Shares on Issue: 43,456,206
Options: 6,440,000
Fully Diluted Capital: 49,896,206
Market Value Fully Diluted: Aus$76,341,195 (US$45,804,717)
TRADING VOLUME
MONTH AUS VOLUME US VOLUME TOTAL VOLUME
April 2000 454,003 16,476,500 16,930,503
May 2000 723,033 10,397,050 11,120,083
June 2000 1,906,976 4,288,400 6,195,376
Total 3,084,012 31,161,950 34,245,962
Eromanga Hydrocarbons NL Mining Exploration Entity Report for the quarter ended 30 June 2000
During that period Eromanga:
(a) did not incur any development expenditure, and
(b) incurred $1,164 exploration expenditure.
Exploration activities for the period consisted of:
(1) EL 4223 Casterton and EL 4275 Casterton East.
The outstanding items requiring to be completed for the transfer of Exploration Licences 4223 'Casterton' and 4275 'Casterton East' to Eromanga Hydrocarbons NL from Golden Triangle Resources NL have been submitted to the Department of Natural Resources and Environment by Eromanga Hydrocarbons. On confirmation of the transfers, exploration will then be able to recommence with the principal targets of gold and gold/copper mineralisation.
(2) Emery County State of Utah USA
No activities were undertaken
HIGHLIGHTS
* Full year production of 48.9 mmboe; an increase of 6.1 per cent on the previous year.
* Maui gas annual sales increased 15 per cent over the previous year, driven by continued strong gas demand from the electricity and methanol sectors.
* Record gas production in Canada with sales of 53.7 bcf for the year; a 5.5 per cent increase over the previous year.
* Pohokura-2 tested 30.7 mmscf/d of gas and 2,670 bbl/d. Following the discovery well, this appraisal success contributed to the booking of 131 bcf and 6 mmbl of proved reserves net to Fletcher Challenge Energy.
* Development activity began on the newly acquired heavy oil properties in Saskatchewan.
* First full financial year of production completed in Brunei.
HIGHLIGHTS
* Second pass drilling on the Company's Mupane Prospect in Botswana has intersected significant gold mineralisation. Deeper holes in Area 1 of the Prospect have confirmed the mineralisation extending strongly to depth with better intersections including:
Hole MUPD 25 23.8 metres @ 3.2 g/t gold
Hole MUPC 62 67.0 metres @ 4.4 g/t gold including 10.0 metres @ 12.1 g/t gold
Hole MUPC 63 55.0 metres @ 4.3 g/t gold including 9.0 metres @ 12.8 g/t gold
* A further 55 RC percussion and 3 diamond drill holes were completed on the Mupane Prospect in the period 7 February to 2 June 2000. The drilling has confirmed that the gold mineralisation at Area 1 forms a robust shoot with open pit potential. Additionally, in adjacent Areas 2 and 3, semi-continuous gold mineralisation has now been defined over a strike length of 1,300 metres. A follow up drilling program is currently being planned.
* Elsewhere on the Botswana Gold Project highly encouraging trench results have been obtained on the Molomolo and Matopi Prospects. Extensive zones of gold mineralisation have been defined on both prospects. At Molomolo trenching has confirmed gold mireralisation extending over 1,900 metres with a best intersection of 34 metres @ 2.2 g/t gold. At Matopi trenching has outlined a +0.1 g/t bedrock gold anomaly extending over a 500 metre long by 80-200 metre wide area. Both areas will shortly be ready for drill testing.
* The Company has recently acquired, at little cost, the former Falconbridge Tekwane Property that covers the eastern half of the intrusive body that hosts the operating Selkirk nickel mine. The property covers the Tekwane nickel prospect and a significant and undrilled 2.8 kilometre long gravity anomaly. The anomaly has a similar signature to anomalies associated with the Selkirk mine and the Telkwane nickel prospect. The Falconbridge data-base is presently being re-processed.
Fourth Quarter Activities Report
PRINCIPAL POINTS
CURRENT EXPANSION ACTIVITIES FOR 2000/2001
* Both Gympie Gold's businesses Gympie Eldorado Gold and Southland coal, are in the midst of major expansion phases.
* Monkland Mine is developing rapidly to increase gold production to 50,000 oz pa and construction of the new Lewis Mine has commenced, which will add a further 50,000 oz pa. The relevant mining leases have been granted.
* Southland operations will start to mine the Bellbird South leases when the longwall move is completed in October.
GOLD EXPLORATION
* Large high grade stockwork orebody discovered in Monkland Mine is being explored and developed. It is proving to be in the order of 60 metres long, 35 metres wide and over 60 metres high, averaging about 12 g/t. Drilling is at an early stage.
* A new ore target for the Lewis Mine, the "Cornish Lode", has also been discovered. Cornish Lode environment extends from near surface to the deepest mine workings.
* Two potentially large stockwork zones, separate from the Cornish Lode, have been identified near the new Lewis Mine and will be drilled soon.
PRODUCTION
* Gold production 6,432 ozs at cash operating cost $488 (US$292) per ounce. These high costs reflect the emphasis on development and mechanisation during this period. For the whole year cash operating costs averaged $375 (US$225) per ounce.
Coal production of 105,687 tonnes, all of which sold as semi-hard coking product. The longwall unit is being readied for transfer to panel SL2 where the seam is +5 metres thick.
FINANCIAL
* Cash and bullion now $3.4 million after expansion activities. Credit lines being expanded to finance the continuing rapid expansion.
* Currently delivering gold sales into hedge contracts at $A502/oz and coal sales into forward currency contracts at an average exchange rate of about US 63.00 cents to A 100 cents.
Fourth Quarter Activities Report
HIGHLIGHTS RAPU-RAPU POLYMETALLIC PROJECT, PHILIPPINES
* 1,992m of drilling completed and assays for 5,384m of previous drilling obtained. A total of 1,992m DD drilling was completed during the quarter. Much of the drilling was undertaken for metallurgical and geotechnical purposes and so occurred within the existing reserve. Several excellent results were achieved however in areas to the east of the announced reserve. These include oxide mineralisation at surface of 7m at 32.61 g/t Au and 77.34 g/t Ag, and 10m at 4.75 g/t Au and 77.34 g/t Ag. Within the proposed pit, numerous very satisfactory results confirmed the continuity and grade of the orebody, including 30m at 6.67 g/t Au, 59.58 g/t Ag, 3.19% Cu and 2.71% Zn, 11m at 6.32 g/t Au, 64.07 g/t Ag, 4.26% Cu and 3.79% Zn, 31m at 3.94 g/t Au, 33.71 g/t Ag, 2.17% Cu and 3.59% Zn and 27m at 4.00 g/t Au, 36.16 g/t Ag, 2.09% Cu and 5.18% Zn.
* Pilot plant programme commenced. A bulk sample of approximately 20 tonnes of ore was sent to Perth where pilot plant metallurgical testwork has commenced.
* Bankable Feasibility Study advanced. Progress with the bankable feasibility is continuing and the study will be completed during the current quarter
* Environmental Impact Statement in preparation. Independent consultants engaged by the Company are preparing an Environmental Impact statement for submission to the regulatory authorities during the current quarter.
CORPORATE
* Bridge Loan Facility with Standard Bank finalized. Documentation of the US$3m Corporate Loan Facility advanced from Standard Bank was executed.
* Stage II of Lion Selection placement completed. The second tranche of the placement to Lion Selection Group was completed raising A$3.9m in additional equity.
* Change of Name. Following the receipt of shareholder approval on May 22, the Company changed its name and status from Lafayette Mining NL to Lafayette Mining Limited.
Fourth Quarter Activities Report
Pasminco achieved record production levels for the year ended 30 June 2000, reflecting improved performance from the Group's existing operations, initial production from the Century mine, and a full year's contribution from the Clarksville smelter and associated mines in the US.
Total zinc and lead production from the Group's mines and smelters during the June quarter was 15% higher than the corresponding quarter in 1999 and 17% higher than the previous year.
Mine production during the June quarter was assisted by the contribution from the Century mine, which although operational from 1 March, is still in ramp-up phase.
The Group's smelters achieved record production, 13% ahead of last year, despite lower production in the quarter at the Budel smelter in the Netherlands due to a maintenance shutdown, and lower production at Cockle Creek. The Hobart, Port Pirie and Clarksville smelters all set new annual production records.
Second Quarter Activities
HIGHLIGHTS
CSG PACRIM JOINT VENTURE
At the AGM on 30 May 2000, shareholders ratified the company's participation in our technology Joint Venture with Currumbin Sand & Gravel Pty Ltd, part of the Neumann Group of Companies.
Research under this Joint Venture has commenced and will initially concentrate on:
* Pilot plant scale confirmatory research on the treatment of contaminated waters and general desalination of water at domestic through to large industrial scale.
* Bench scale confirmatory research on the treatment of ores and minerals as an aid in the hydrometallurgical recovery of metals in mining.
* Groundbreaking research on application of the technology for the manufacture of photovoltaic (PV) solar cells, lithium ion batteries and platinum catalytic converters.
BLOCK C1, CHINDWIN BASIN, MYANMAR
Ministry of Energy agrees to an extension of the production sharing (exploration) contract for an indefinite period to provide extra time for Pacrim to obtain a farmout partner to fund future exploration and drilling.
An assessment of the coal resources and reserves of the Central Queensland Coal Associates (CQCA) and Gregory Joint Ventures as at 30 June 2000 has recently been completed. In summary, QCT Resources' share of Joint Venture resources has increased by 26% to 2,533 million tonnes (1999: 2,017 million tonnes), and its share of the Joint Ventures' marketable reserves has increased by 95% to 554 million tonnes (1999: 284 million tonnes).
In the quarter ended 30 June 2000, the QCT Resources Limited Group's coal shipments totalled 3,815,000 tonnes. This total comprised 2,647,000 tonnes from its share of the Central Queensland Coal Associates (CQCA) and Gregory joint venture mines and 1,168,000 tonnes from the South Blackwater mines.
Second Quarter Activities Report
* Record iron ore production for the first half of 2000 was 18% higher than the comparable period in 1999. Shipments of 32 million tonnes were a first half record and 21% higher than the comparable period in 1999.
* Aluminium production increased 11% in the first half of 2000 compared with the first half of 1999, helped by the increase in Rio Tinto's stake in Comalco during the second quarter of 2000.
* Mined copper production for the second quarter of 2000 was similar to that in the first quarter but production for the half year was down 6% on the comparable half in 1999 due to lower grades, primarily at Escondida, Chile and Grasberg, Indonesia.
* Mined gold production was 14% lower for the half year compared with the first half of 1999. Gold grades were higher at Kennecott Utah Copper, USA but these were more than offset by lower grades at Grasberg, lower production at Kelian, Indonesia and the end of mining at Ridgeway, USA.
* Coal production for the half year was 8% lower than the first half of 1999 with lower production in the US due to reduced customer requirements and at Kaltim Prima, Indonesia due to adverse weather in the first quarter and a pit reconfiguration.
* Borates production for the half year was down marginally compared with the first half of 1999. Titanium dioxide feedstock production was down 10%, partly as a consequence of the damage caused by the fire at QIT, Canada in June 1999.
Sydney Gas advises that its wholly owned subsidiary Sydney Gas Operations (SGO) has lodged an application with the NSW Department of Mineral Resources ("DMR") for an Assessment Lease within PEL 2 in the Sydney Basin.
The Assessment Lease applied for covers an area of 48 square kilometres south-west of Camden including the area where the Johndilo Pilot Project is located and seeks an initial term of 6 years. Under its application SGO has sought approval from the DMR to deliver gas to the AGL Gas Networks distribution system at Menangle Road, Camden pursuant to SGO's Gas Supply Agreement with AGL Wholesale Gas Ltd dated 12 August 1999.
EXPLORATION ACTIVITIES REPORT
QUARTER ENDING JUNE 30, 2000
HIGHLIGHTS
* Drilling is planned at Millennium Minerals Quidong Zinc Project in south eastern New South Wales. During the quarter an analysis of all previous geological, geochemical and geophysical data sets was completed providing new insights into potential mineralised zones at depth.
* Millennium Minerals was granted exploration title to two areas and holds an application for a third area covering 560 square kilometres of unexplored Quaternary beach and palaeo strandlines at Israelite Bay, some 250 kilometres east of Esperance, Western Australia.
* Sons of Gwalia Limited completed a regional exploration programme at the Raeside project near Leonora, Western Australia with the best result being 3 metres of 2.27 g/t Au.
FOR THE THREE MONTHS ENDED 30 JUNE 2000
SUMMARY
* Argyle diamond production for the quarter of 7.5 million carats.
* Record first half Argyle sales of $US246.5 million.
* Higher prices for Argyle diamonds, increasing by over 10% during the first half of 2000.
* Diamond production for Merlin for the quarter was 44,755 carats.
* First half Merlin sales of US$7.1 million, with an average of US$113 per carat.
* Largest gemstone recovered so far at Merlin: 26.92 carats.
* In Angola, Cuango Project production was lower due to temporary suspension of production. Kimberlite search to commence in second half.
* Ashton Mining Limited has sold an additional 16% interest in its Mt Weld Rare Earths and Tantalum Projects to Lynas Corporation Limited for $3.2 million.
* Encouraging microdiamond results from Alberta, Canada and in theNorthern Territory's Batten region.
* Appointment of Justin H. Gardener as Ashton's new non-executive Chairman.
* Appointment of Robert T. Boyd as Ashton Mining of Canada Incorporated's new President and Chief Executive Officer.
* Buy-back completed. Ashton purchased 5% of its issued capital, equivalent to 16.6 million shares.
* Doug Bailey, CEO, Ashton, says "Ashton expects the half year pre-abnormal profits to be 10-20% above last year's full year preabnormal profit result."
HIGHLIGHTS
* At Slate Bore in the Ashburton region of WA, further geological and geochemical surveys have outlined a large (500-800m by 5-6,000m) alteration system with potential for significant gold mineralisation.
* Reverse circulation percussion drilling of well defined gold targets at Slate Bore is scheduled for August 2000.
* Strong interest is being expressed by other explorers in farming into Cullen's major De Courcy project.
* Interpretation of recently acquired detailed airborne magnetics over the Killaloe property in the Kambalda-Norsemen Belt is in progress.
* Strong copper and zinc geochemical anomalies at White Well in the North Eastern Goldfields of WA indicate potential for base metal/gold mineralisation.
Fourth Quarter Activities
VICTORY DAM (Golden Deeps 100%)
The project is located in the Bulong District of the East Coolgardie Mineral Field, approximately 26km east of Kalgoorlie.
The tenements cover several lithological and structural formations considered highly prospective for the occurrence of economic base metal (Cu, Zn, Ag) and gold mineralisation.
TWIN HILLS - MENZIES (Golden Deeps 100%)
During the current reporting period Golden Deeps NL completed evaluation of gold mineralisation at the Twin Hills Main Mine and commenced mining operations.
Golden Deeps NL is aiming to mine a parcel of approximately 15,000 tonnes of high grade gold ore averaging 18.6 g Au/t.
BLUE FUNNEL (Golden Deeps 100%)
During the current reporting period Golden Deeps continued structural interpretation of the Blue Funnel Project area.
GARDEN GULLY - COOLGARDIE (Golden Deeps 100%)
No exploration activities undertaken during the current reporting period.
HIGHLIGHTS
PHILIPPINES
* The Fuga Island-1 was drilled, plugged and abandoned after failing to encounter significant hydrocarbons.
* Production from the Matinloc and Nido platforms increased significantly.
* Discussions with potential farminees to drill the Coron North prospect continue.
CHINA
* Nido and its partner withdrew from the Zhongyuan project following the unexpected failure to finance the ongoing project.
NEW BUSINESS
* Nido continued to evaluate, new business opportunities outside the Philippines and China that provide both stability and sound growth potential.
Second Quarter Activities Report
EDJUDINA, WESTERN AUSTRALIA (Pacific Energy Limited (90%))
GOLD
No field work was conducted during the June 2000 Quarter.
GOLD
WOOLGAR PROJECT, QUEENSLAND - STRATEGIC MINERALS CORPORATION NL (100%)
DIAMOND DRILLING PROGRAM
Preparations are now underway for the conduct of an initial deep diamond drill program at Woolgar to target the potentially high-grade mineralisation in the Lost World zone
An independent review of existing data identified a zone, which has the potential to host a one million ounce gold reserve of higher grade tenor.
These deeper untested bonanza style targets are defined within what constitutes a dilational jog within the fault zone at the centre of the known Lost World orebody. The drilling program will also provide an opportunity to assess additional observations from the data review, which may impact on the near surface resources at Lost World. It is anticipated that the drilling will commence in the latter part of August, 2000.
GOLD/COPPER
WESTERN WOOLGAR PROJECT, QUEENSLAND - STRATEGIC MINERALS CORPORATION NL (100%)
The grant of the license for new tenement area (EPM 11735) has not yet been received due to delays associated with native title legislation. No on the ground activity or expenditure will be incurred until the lease has been formally granted.
The new application Western Woolgar, which is prospective for gold and copper mineralisation, includes six distinct target areas based on a structural assessment supported by magnetic and radiometric signatures. A major anomaly located to the North of the existing joint venture tenement area EPM 9599 is on a regional tectonic structure which has characteristics of the magnetic anomaly that is associated with the mineralisation at Olympic Dam.
MINERAL SANDS
BAYFIELD PROJECT, QUEENSLAND STRATEGIC MINERALS CORPORATION NL (20%) AND RZM PTY LTD (80%) JOINT VENTURE
No fieldwork was carried out during the quarter. Further meetings will be held with the Queensland Government regarding the future of the project.
Fourth Quarter Activities
Exploration -
During the quarter, reconnaissance rotary air core drilling was completed on the Pinjaring project, and one metre sample splits were submitted from the Jitarning, Merilup, and Pinchin Gully drilling programs completed last quarter.
Drilling -
Pingaring: Three air core holes were completed at the interpreted southern extension of an ultramafic granulite containing elevated nickel and cobalt levels in the weathered zone. Ultramafic units were intersected giving a potential strike length of 2300m. Further drilling is required in the central section over private land for
which access is still to be agreed.
1 METRE SAMPLE RESULTS
Jitarning: Significant results were:
JT21 1m @ 3.46 ppm Au, from 0-1m
JT38 1m @ 3.15 ppm Au, from 30-31m(EOH)
Merilup: Significant gold geochemistry (>100ppb) was confirmed in coherent trends within the saprolite and saprock. The highest results were recorded in the bottom 2 metres of hole MIRB15, 621ppb and 383ppb respectively. Further drilling is required over an extensive area of gold in soil anomalism.
Pinchin Gully: Significant results were:
TP17 1m @ 1.90 ppm Au, from 24-25m
1m @ 15.76 ppm Au, from 25-26m
1m @ 3.47 ppm Au, from 26-27m
1m @ 3.08 ppm Au, from 27-28m
1m @ 2.61 ppm Au, from 30-31m
1m @ 2.19 ppm Au, from 32-33m
TP40 1m @ 2.19 ppm Au, from 5-6m
1m @ 1.52 ppm Au, from 6-7m
1m @ 1.13 ppm Au, from 19-20m
1m @ 1.30 ppm Au, from 20-21m
Further drilling is required including the twinning of previous drill holes to improve confidence in the earlier results.
Anaconda Nickel has entered into an agreement with Lynas Corporation under which Anaconda can acquire between 80 and 100% of all metals in one of the largest, if not the largest, tantalum and niobium deposits in the world.
Second Quarter Activities Report
ORE PROCESSED - AK1 & ALLUVIALS
AK1 ore processed for second quarter 2000 was 14% more than the corresponding period last year as a result of an increased plant utilisation and feed rate. Alluvial ore processed for second quarter 2000 was lower than the same quarter of 1999 due to poor performance of three screening units. All screens have been replaced and the problem is not expected to re-occur.
DIAMONDS PRODUCED - AK1 & ALLUVIALS
The recovered grade was lower in second quarter 2000 but this was offset by an increase in the AK1 tonnes processed. Lower Alluvial carats produced reflect both lower feed rates and lower ore grade. Target production for 2000 is forecast at 26 million carats.
ARGYLE - OTHER DEVELOPMENTS
Late in July, Argyle hosted an analysts' visit, where recent developments at Argyle were reviewed. The presentation provided is on the Ashton web site (www.ashton.net.au). Argyle management expects the productivity improvements achieved over the last two years to continue. Both tonnes mined and ore processed per employee have increased significantly during this period. Mining costs have fallen by 37% since 1997. Work is progressing on further optimising the process plant, with modifications that would boost recovery being evaluated for approval in early 2001.
DIAMOND BEARING CRATER FILL ROCKS FROM STREAK OF LUCK TUNNEL
The Streak of Luck Tunnel, at Copeton, near Inverell, has intersected a diamond bearing mass of broken and slurried rock fragments and boulders (sedimentary breccia) beneath the granite bedrock ground by gasses (tuffisite) previously mined. This sedimentary breccia is up to two metres thick, and horizontal, and its nature and setting is consistent with debris slurried into a volcanic crater lake. Angular fragments of swamp derived clay demonstrate that an earlier crater lake was disrupted to form this diamond deposit.
The Manager of the Laverton Joint Venture, Metex Resources NL, has reported that a new gold prospect has been delineated 17km south-west of Laverton and 5km north of the Wallaby discovery, within the Metex-Delta-Exodus Joint Venture, where the respective interests are 37.5% Metex, 37.5% Delta and 25% Exodus. The prospect lies north-west of the Omo prospect, where previous drilling has encountered up to 14 metres at 3.6g/t gold.
SUMMARY
* GCR now has 100% of the Copper Hill gold-copper-palladium porphyry project. A preliminary resource estimate is being compiled and the palladium potential of the project is being assessed.
* Independent resource estimate points towards a potentially viable silver-barite resource at Kempfield.
* Preliminary drill results from Quarry Hill at the Yellow Mountain project warrant further drilling. Probable porphyry-related copper-molybdenum mineralisation was identified at the 10 km-long Melrose magnetic anomaly.
* Results from four drilling programmes expected next quarter.
* GCR has four continuing joint ventures with major mining companies looking for world-class deposits. JV partners are Placer/Delta, Newcrest, WMC and Pasminco. GCR continues to progress other projects for JV.
* Investigations are continuing into possible hi-tech investments. No negotiations are underway at this time.
HIGHLIGHTS
* GCR exercised an option, under an agreement with Cyprus Amax Australia Corporation, to increase its interest in the Copper Hill project to 100%. GCR will purchase Cyprus' 75% interest in Copper Hill in consideration of 2,495,556 GCR shares. The project is located at Molong, NSW, 40 km NNW of Newcrest's Cadia. Ridgeway project. GCR is presently compiling over 30,000 assays into one database to identify potential resources and generate priority drill targets. During the quarter RC drilling intersected 2m of 9.31 g/t gold and 0.12% zinc from 12m below surface. Examples of significant palladium assays are set out in the table on page 4.
* Independent consultants Hellman & Schofield (H&S) undertook a resource estimate on the BJ Zone at Kempfield using ordinary kriging. H&S outlined a combined indicated and inferred resource of 2.4 million tonnes at 97 g/t silver and 25% barite, at a 60 g/t silver cut-off, for a total of 7.4 million ounces of silver and 300,000 tonnes of barite.
* At the Quarry Hill prospect within the Yellow Mountain licence on the Gilmore Suture in NSW, one hole was drilled before bad weather interrupted the programme. This hole contained anomalous gold throughout, with one zone returning 12m at 0.53 g/t gold. Drilling will continue in the September quarter. Geological observations of old diamond drill core from the Melrose magnetic anomaly indicate that the hole was drilled proximal to a large intrusive magmatic complex which has produced extensive hydrothermal alteration and other characteristics of porphyry-style copper-molybdenum mineralisation.
Australian mining and exploration company, Gympie Gold Limited has announced that a previously unrecognised orebody has been found and drilled in its Monkland Mine at Gympie in southeast Queensland.
The orebody is located adjacent to the new rail heading on Level 12, at 550 metres depth and only 370 metres northwest of the recently expanded No 2 production shaft.
Gympie Gold Limited has announced the development of its second gold mine, the Lewis Decline Mine at its mining operations at Gympie in South East Queensland. The development is aimed to commence in the June quarter, Subject to confirmation of support by other key stakeholders particularly the Gympie community, regulatory authorities, the selected mine contractor and our financiers.
CURRENT EXPANSION ACTIVITIES FOR 2000/2001
* Revised Southland Coal Mine Plan to increase coal production to 1.4 million tonnes.
* Revised Monkland Mine plan to increase gold production to 50,000 oz.
* Launched Gympie Gold-In-Quartz Gemstone joint venture with major North American jeweller Kabana Inc.
* Aim to commence developing Lewis Decline Mine to further increase gold production and to explore nearby encouraging prospects.
GOLD EXPLORATION
* Significant drill intercepts in Monkland Mine include a new stockwork orebody comprising 10 metres at 20.3 g/t, Inglewood Lode comprising 2.9 metres at 30.3 g/t and in the Lewis Mine Project area comprising 2.4 metres 10.3 g/t.
* Near-surface of drilling of newly discovered Sovereign System include 1.2 metres at 206 g/t and 2 metres at 11.2 g/t.
* Discovered several potentially bulk mineable stockwork zones in Monkland Mine and Lewis Project areas.
PRODUCTION
* Gold production of 7,914 ounces at cash operating costs $368 (US$220) per ounce.
* Coal production of 127,025 tonnes all of which sold as semi-hard coking product.
FINANCIAL
* Cash and bullion now $4.9 million after expansion activities. Unused credit lines being expanded.
* Currently delivering gold sales into hedge contracts at $A500/oz and coal sales into spot. Hedge contracts for gold are all capable of conversion into forward sales at minimum $A500 per ounce within our six year facility and forward currency contracts are at average exchange rate US 63.83 cents to A 100 cents.
Fourth Quarter Activities
SERAM JOINT VENTURE
* Kufpec, a subsidiary of the Kuwait Foreign Petroleum Exploration Co., the operator of the Seram joint venture in which Kalrez holds a 2.5% interest is proceeding on schedule to Phase 1 production.
The Oseil discovery within the Seram Joint Venture area, is anticipated to produce between 12,000 to 18,000 barrels of oil per day commencing last quarter 2001 increasing to 45,000 barrels of oil per day during Phase 2 production.
* The calculated reserves for the Oseil field are 121.97 million barrels of oil with estimated recoverable reserves of between 43.02 million barrels (low) and 61.2 million barrels of oil (high).
* Kufpec, as operator has awarded the contract for road construction and site preparation. The contractor is currently mobilising to site to commence work.
* The tender for all development work involved in the Phase 1 Development including completion of the existing 3 Oseil wells, construction of processing facilities and construction of a Mini Refinery / Stripping Plant to process Oseil crude into HSFO (High Sulphur Fuel Oil) and NAPTHA closed on 6th July 2000.
* The tenders received are currently being evaluated however, it is pleasing to report that the lowest bids are substantially below the costs budgeted by Kufpec.
The tenders also provide for the contractor to specify operating costs for the first two years of operation, and these figures are also below budget projections.
It is anticipated that the successful tenderer will be announced on the 10th August 2000.
EAST COAST SERAM DEVELOPMENT PROPOSAL
* Kalrez has submitted to the Seram Joint Venture a four well shallow development program for the 2001 year work program. Other Joint Venture parties will vote in September 2000 on whether they intend to participate in this program. If they decline, Kalrez intends to "Sole Risk" the program and proceed alone to drill the wells.
* There are many oil seeps along the Seram Island coast, in close proximity to the existing Bula infrastructure. The four wells proposed in the program range in depth from 210 metres to 650 metres and the locations are from 16 to 31 kilometres south of Bula and adjacent to the coastline.
* Unrisked Reserves for the four structures are 12.3 million barrels of oil.
OTHER ACTIVITIES
* During the quarter Kalrez reviewed a number of other oil and gas opportunities and conducted an in depth study on one oil opportunity which it is currently evaluating.
* Subsequent to 30th June 2000, 86,666,666 additional shares and options were placed through brokers, raising a further $3.25M before fees. These shares and options were issued under the Prospectus dated 14th April 2000. The company now holds approximately $8 million in cash funds, which is sufficient for all Bula and Seram area proposed expenditure through to December 2001 and leaves a comfortable margin of funding for working capital and contingencies.
Fourth Quarter Activities
BULA FIELD
* Oil production at the Bula Oil Field continues in accordance with forecast targets. Production of oil for the quarter was 56,469 barrels. Crude oil lifted and sold within the quarter amounted to 41,447 barrels at an average of US$22.84 per barrel resulting in gross revenue of US$946,649.
* At the end of the quarter the company held in storage inventory, of 86,557 barrels of oil. Approximately 41,000 barrels of this inventory was shipped in the second week of July and the resultant revenue will be reported in the September quarter. The price to be received for oil shipment in July will be known in the first week of August. The Bula Indonesian crude price for June was US$28.46 per barrel, and would value the June inventories at approximately US$2.46 million.
* A further shipment of between 40,000 - 50,000 barrels of oil is planned for early August 2000.
* The Bula Oil Field operated profitably during the quarter and continues to do so.
* Kalrez is proceeding with its plans to drill 13 new oil wells in the Bula oil field and to workover 20 existing oil wells.
* Drill site locations for all wells to be drilled have been finalised as a result of the completion of a major geophysical and petrophysical study of the Bula Field. Equipment is currently being mobilised for the drilling program. A shipping delay in respect of some items of essential equipment has resulted in a six week delay in the commencement date of the drilling program.
HIGHLIGHTS
LAVERTON EXPLORATION JOINT VENTURE (METEX - DELTA GOLD LTD)
* Reconnaissance drilling on a new conceptual target South of Red Flag returns encouraging results on all sections completed over a 1,400m strike length. Intersections from an intensely weathered and depleted dolerite host include 3m @ 3.66g/t and 5m @ 2.59g/t together with individual metre intercepts up to 23.7g/t. To date the primary source has yet to be identified.
* At Dream/Brians Patch the first, and to date, the only RAB traverse completed testing a 1,200m soil anomaly has intersected mineralisation in two holes with results ranging up to 8m @ 1.77g/t.
* At Lancefield North the northern extensions of the West Lode horizon from Lancefield have been identified from reprocessed geophysical data. Anomalous results have been returned from drilling completed to date including 7m @ 0.94g/t from a horizon that remains open along strike.
VICTORIA
Initial AC drillhole traverse testing for the repetition of one of Victoria's most productive goldfields at Stawell returns bedrock mineralisation from beneath the overlying Murray Basin sediments at the Kewell Prospect. Best results from there widely spared holes include 6m @ 1.67g/t.
GENERAL
* Retain approximately $1.4 million in cash at the end of the June Quarter.
* Bonus option issue successfully concluded on 7 June 2000 resulting in the issue of 15,771,739 free options exercisable at 20 cents per share on or before 20 June 2004.
* Visit our Web Site at http://www.metex.com.au for all up to date information on current drilling programs and releases.
Molopo Australia NL announces that on July 24th, 2000 it spudded the third well (LW-L3) of its four well pilot program at its Liulin coalbed methane gas project, in Shanxi Province, China.
This follows the successful drilling of the LW-L1 and LW-L2 wells that, as previously reported, intersected the target gas saturated coal seams at the prognosed depth and thicknesses.
The LW-L3 well will be drilled to its target depth before being cased following which fracture stimulation of all three new wells plus the cavitation stimulation of the previously drilled HW-LIB well will take place. This will then be followed by an extended production test of up to 6 months.
TSAGAAN SUVRAGA PROJECT, MONGOLIA
An appeal has been lodged following the decision of the Mongolian Courts ordering the restoration of Molopo's exploration license over the Tsagaan Suvraga copper project. The Mongolian Courts will hear the appeal during the current quarter.
Australian oil and gas company, Novus Petroleum Limited, more than doubled revenue in the first half of 2000 following higher production and increased world oil prices.
Revenue from Novus' Australian and overseas petroleum interests jumped 116% to $91.5 million in the half-year ended 30 June, 2000 compared with $42.4 million in the previous corresponding period.
Second Quarter Activities Report
Highlights for the June 2000 quarter were:
* continuing strong revenue & production;
* continuing exploration success and increasing gas sales in Egypt (reaching over 200 mmscfd in June);
* receipt of an investor relations award.
DEVELOPMENTS
* Indonesia-West Natuna Gas Project, Kakap PSC, (Novus 25%) proceeding ahead of schedule. Laying of the 469km-long main 28" trunkline was completed ready for pressure testing.
* Indonesia-Malacca Strait PSC, (Novus 26,03%), a five well infill development programme on the Melibur Field has commenced.
EXPLORATION/APPRAISAL
* Egypt-Khalda concessions (Novus 10%)
* Salam North-7X exploration well tested 900 bopd and was completed as an oil producer.
* Neith South-2X appraisal well was drilling ahead at 4,400m.
* Australia - SA Cooper Basin (Novus 4.75%)
* Toolachee West-1 was suspended as a gas discovery.
CORPORATE
* In April 2000, Novus received an investor relations award. The awards, by the Investor Relations magazine, were sponsored by the Australian Stock Exchange. Novus won the "Grand Prix for Best Overall Investor Relations - small cap" for excellence in investor relations.
Second Quarter Activities Report
GENERAL
During the quarter production of Dense Medium Magnetite for use in Coal Washeries continued.
MINING
Mining from Kara No. 1 continued during the period with 21,844 tonnes of ore being mined from the Kara No. 1 pit and delivered to the concentrator plant stockpiles. In addition 532 tonnes of overburden was removed.
OVERVIEW
Recent strong increases in the price of oil to levels of US$30 per barrel and above has resulted in a positive outlook for the oil and gas exploration and production sector, both in Australia and the US. The unprecedented high gas prices in the domestic US market in excess of US$4 per mcf (A$6.90 per mcf) provide a very strong incentive for gas exploration in the USA.
This background of high prices for oil and gas provides a very good back drop for the exciting phase of drilling activity that Victoria Petroleum will embark on the next 9 months in the Carnarvon Basin, Australia and the San Joaquin Basin, California and indirectly through the US development activities of Kestrel Energy Inc a NASDAQ listed US oil and gas explorer in which Victoria Petroleum holds a 19% shareholding.
Highlights of the next six months of Carnarvon Basin and San Joaquin Basin drilling with estimated commencement dates, area and potential target size taken from the drilling program of up to 17 wells planned by the company over the next nine months, are shown in drilling highlights.
DRILLING HIGHLIGHTS
* Early August 2000- Pipeline/EKHO Prospect, 2.1 trillion cubic feet of gas and 346 million barrel oil potential San Joaquin Basin, California, USA
* Late August 2000-
Chamois Prospect, 29 million barrel oil potential, WA-261-P, Carnarvon Basin, North West Shelf, Western Australia
* Early September 2000- Rehbok Prospect, 29 million barrel oil potential, WA-261-P, Carnarvon Basin, North West Shelf, Western Australia
* Late September 2000-
Kingfisher Prospect, 25 million barrel oil and 189 billion cubic feet gas potential, San Joaquin Basin, California, USA
* October 2000-
Raven Prospect, 25 million barrels oil and 159 billion cubic feet of gas potential, San Joaquin Basin, California, USA.
* November 2000-
Eagle Prospect, 44 million barrels oil and 88 billion cubic feet gas potential, San Joaquin Basin, California, USA.
* December 2000-
Hawk Prospect, 127 million barrels oil and 262 billion cubic feet gas potential, San Joaquin Basin, California, USA.
EKHO PROJECT UPDATE
Tri-Valley Oil & Gas Co announced that it will resume testing of its EKHO No 1 deep around the end of the month.
The whole budget of $1,028,900 has been committed by the partners.
Victoria Petroleum NL advises that Ivanhoe Energy Inc, a leaseholder on the East Lost Hills trend plans to drill a well, Ivanhoe Northeast Lost Hills No 1, in the San Joaquin Basin, California, 18 kilometers to the north west of the currently production testing Tri-Valley Oil & Gas operated EKHO-1 well on Victoria Petroleum's Pipeline Prospect.
Second Quarter Activities Report
ORE PROCESSED - AK1 & ALLUVIALS
AK1 ore processed for second quarter 2000 was 14% more than the corresponding period last year as a result of an increased plant utilisation and feed rate. Alluvial ore processed for second quarter 2000 was lower than the same quarter of 1999 due to poor performance of three screening units. All screens have been replaced and the problem is not expected to re-occur.
DIAMONDS PRODUCED - AK1 & ALLUVIALS
The recovered grade was lower in second quarter 2000 but this was offset by an increase in the AK1 tonnes processed. Lower Alluvial carats produced reflect both lower feed rates and lower ore grade. Target production for 2000 is forecast at 26 million carats.
ARGYLE - OTHER DEVELOPMENTS
Late in July, Argyle hosted an analysts' visit, where recent developments at Argyle were reviewed. The presentation provided is on the Ashton Mining Limited web site (www.ashton.net.au). Argyle management expects the productivity improvements achieved over the last two years to continue. Both tonnes mined and ore processed per employee have increased significantly during this period. Mining costs have fallen by 37% since 1997. Work is progressing on further optimising the process plant, with modifications that would boost recovery being evaluated for approval in early 2001.
Fourth Quarter Activities Report
OVERVIEW
AUSTRALIA
The due diligence process on the Bow River Farm-in was completed and a formal Joint Venture agreement was signed with Conquest Mining NL relating to their tenements within the vicinity of the Company's Bow River diamond mine in the East Kimberley of Western Australia. The tenements covered under the agreement are situated to the southwest of the Argyle diamond mine and abut the Company's Bow River tenements.
INDIA
All results from the Company's Joint Venture with WSIL Mineral Sand India Pvt Ltd on PL3/98 in Rajasthan have been received. Although a number of samples recovered indicator minerals, none of them are unequivocally kimberlitic or warrant follow-up exploration. Consequently the Company has notified the Indian Joint Venture partners of its decision to terminate the Joint Venture.
CHINA - QUANTUM ASTRO JOINT VENTURE
Field programs continued in the Mengshan area of Shandong province close to the producing Pipe 701 diamond mine and within an area where farmers previously discovered a two carat rough diamond.
OVERVIEW
CIBALIUNG PROJECT - WEST JAVA, INDONESIA
The Company is carrying out diamond drilling at the Cibaliung Project to confirm and extend the previously announced Inferred Resource of 993,000 tonnes @ 9.78 g/t Au and 57.4 g/t Ag containing 312,230 ounces of gold and 1.83 million ounces of silver. Results to date, from 7 drill holes (1,760m), are encouraging.
SARAN PROJECT - WEST KALIMANTAN, INDONESIA
* The Saran project received only one expression of interest during its offer period up to 30-Jun-00. Following a subsequent decision not to proceed, the ARX Board of Directors has elected to terminate the PT. Eastara Melawi Mineral Contract of Work and liquidate the company in due course.
CORPORATE
* ARX exercised its right on 30-Jun-00 to purchase the Cibaliung gold royalty from Palmer Minerals Resources Ltd for C$55,000 following a 14-Jun-00 offer from CAMFLO Resources Ltd, of Vancouver, Canada.
EXPENDITURE
* Total exploration expenditure for the quarter was A$ 380,000.
Following our announcement on 18th July 2000, AMI's directors now advise
* Four of the Rodney Creek wells are now on pump;
* The fifth is configured for pumping;
* All wells on pump are being pumped at about 1400 BWPD, with fluid levels from 10m to 410m.
* All wells are producing small quantities of flarable gas
* Rental generators and Moyno Pump Systems are performing as expected. A spare generator is on site as backup for the five units in use.
* A water disposal system has been installed and will provide water for stock and agricultural purposes to "Glengaris" station, and neighbouring "Summer Hill" station.
* The wells will be monitored on a daily basis and production data will be collected for history matching and reservoir analysis.
Quarterly Report on Exploration and Development -April-June
GOONYELLA MINE, QUEENSLAND (BHP 52.1% interest)
Exploratory mining of a three-heading Adit in the Middle Seam down-dip from the Goonyella highwall continued. Results so far have generally corroborated the interpretations made from surface drilling and seismic surveys. At the end of June a total of 8 759 metres of development had been completed out of a projected total of 13 079 metres.
Small scale faulting has delayed development and led to a budget overrun of about 10%. It is now expected the adit will be completed in December, two months behind schedule. Feasibility studies for a proposed longwall mine are on going.
SARAJI MINE, QUEENSLAND (BHP 52.1% interest)
Exploration activities for the Saraji longwall pre-feasibility study continued. Two-dimensional seismic surveying completed during the quarter confirmed the relative lack of geological structures, which could (if present) negatively impact on any development.
ILLAWARRA COAL, DENDROBIUM PROJECT
Evaluation of potential mine design layouts and estimation of the capital investment that may be required continued during the quarter. Further geological work, engineering studies and environmental work are required to improve confidence levels before any decision can be made.
DEVELOPMENT PROJECTS
The following projects are in various stages of construction and/or development:
MINERALS
ESCONDIDA PHASE IV EXPANSION, CHILE (BHP 57.5% INTEREST)
The current engineering and procurement phase for the proposed 110,000 tonnes per day sulfide concentrator reached 88% completion during the quarter. The joint venture partners continued to evaluate the final feasibility study and the project will be presented for approval in the coming months.
HBI JOINT VENTURE, IRON ORE, VENEZUELA (BHP 50% INTEREST)
Production from two trains on Module 1 commenced on May 29 and commissioning is in progress. Early results relating to performance and briquette quality are encouraging.
Mechanical construction on Module 2 is complete and electrical and instrumentation installation is underway. Commissioning is scheduled to commence late in the first quarter of next fiscal year.
The construction project's lost time frequency rate stands at 0.82.
SAN JUAN UNDERGROUND, NEW MEXICO, USA (BHP 100% INTEREST)
Evaluation of the proposed San Juan Underground coal mine continued during the quarter. Work continued on the completion of the feasibility study including technical peer review, geotechnical and ventilation studies plus third party reviews of safety, health and environmental issues. Submission of the project for development approval will be dependent on successful negotiation of an agreement with the San Juan Generating Station owners and completion of the project feasibility study.
HIGHLIGHTS
ARDLETHAN TIN PROJECT
There was major progress on the Ardlethan Tin Project, including:-
* a further 85 hole drilling programme has defined increased resources, grade and extensions of the Yithan ore body;
* a significant portion of the resources have now been classified as proved and probable reserves;
* a mining plan has been developed to optimise revenue, cash flow and profits over the first three years of operations;
* it is now estimated that a positive cash flow of about $10 million will be generated over the first three years of full operations (compared with $6 million previously estimated), before interest and tax;
* proposals have been received from three smelters to treat tin concentrate from the Ardlethan project. Tin price in Australian dollars has risen since the Feasibility Study;
* financing discussions are well advanced with several groups;
* the final Environmental Impact Statement has been lodged and support is expected from statutory bodies and the local community;
and
* work has been proceeding rapidly on pilot plant test work, water studies and other technical aspects of the project.
In summary, negotiations are progressing well with all the key groups for developing the Ardlethan Tin Project. The target is to achieve full operations within the next twelve months.
CORPORATE
The Company had cash on hand of $592,676 at 30 June 2000, which is sufficient to progress the next stages of seeking approvals, commencing design and test work, which are planned for the next quarter.
HIGHLIGHTS
* Well advanced towards securing effective control of two Indian joint ventures in regard to developing the mineral sand province in Tamil Nadu, India. The two deposits contain some 100 million tonnes of heavy mineral.
* Output of rutile and zircon from domestic operations in line with budget. For the June quarter, the Fullerton dredging operation produced 1,517 tonnes of rutile and 410 tonnes of zircon. For the year to 30 June, Fullerton generated 8,025 tonnes of rutile and 2,553 tonnes of zircon notwithstanding a planned maintenance shutdown of five weeks' duration.
* Sales of 9,000 tonnes of rutile destined for two major overseas customers were loaded at Newcastle during the quarter.
* The company's Development Application to secure additional tenure north and south of the existing Fullerton mine lease progressing as scheduled.
QUARTERLY ACTIVITIES REPORT FOR THE QUARTER ENDED 30 JUNE 2000
SUMMARY OF THE QUARTER
The following is a summary of the exploration, development and corporate activities of Matrix Oil NL during the quarter ended 30 June 2000.
* A comprehensive Front End Engineering Design (FEED) study on the Langsa Offshore Technical Assistance Contract (TAC) has been completed, leading to a revised development plan being designed.
* A detailed Project Development Study for the Langsa Offshore TAC was completed and presented to the Indonesian national oil company, Pertamina, in June 2000.
* Tender documents for the Floating Platform Storage and Offload (FPSO) vessel and subsea systems were issued in July, with a large number of companies registering to bid for the contract.
* The Company has received formal approval from Pertamina, for a 12 month extension to the Langsa Offshore TAC. The extension is effective from 15 May 2000, being the anniversary date of the contract.
* During the quarter, seismic and geological studies continued in the area of the Asahan Offshore Production Sharing Contract, with the intent of finalising a drilling location for an exploratory well to be drilled under the terms of the farm-in agreement.
* The registered office of the Company was moved to Level 2, 8 Colin Street, West Perth, Western Australia.
HIGHLIGHTS
* A free bonus issue of options to existing shareholders on the basis of one option for every four shares held on the record date.
* Approval at the General Meeting of Shareholders to acquire the stage 2 petroleum properties.
* Agreement in principal by the EP413 Joint Venture to drill the Stockyard prospect.
* Completion within budget of the Waingaromia seismic survey and the earning of additional 2.5% equity in the PEP38330 permit.
* An active drilling schedule ahead for the balance of this year and into 2001.
HIGHLIGHTS
CRACOW
* Resource estimate for Royal Shoot: 390,000 ounces of gold, contained within an inferred resource of 1.1 million tones @ 11 g/t gold and 9.5 g/t silver;
* Mining Leases applications submitted for Royal Shoot and Klondyke;
* Prefeasibility studies identify preferred decline portal site;
* Evaluation indicates refurbished Sedimentary plant suitable for treatment of Royal Shoot;
* New intersections at Klondyke North;
KDD154 4.2 metres @ 5.7 gAu/t
KDD157 5.5 metres @ 12 gAu/t
KDD158 0.4 metres @ 24 gAu/t
* Mineralisation continues to be extended at Roses Pride;
Argosy has entered into an agreement with its New Caledonian partner, Societe des Mines De La Tontouta ("SMT"), giving it the rights to acquire the mining concessions at Bogota. These concessions are held by SMT in the Canala area of New Caledonia. The agreement provides Argosy with the rights to additional high grade nickel laterite mineralization within concessions located only 3 kilometres northwest of Argosy's existing project at Nakety.
SUMMARY OF ACTIVITIES
June quarter activity concentrated on reviewing the exploration and appraisal program in preparation for the next phase of the Company's exploration drilling campaign.
The annual pressure surveys required to confirm the reserves of the Dongara Field were also completed. Initial preliminary interpretation of those results suggests that the remaining recoverable gas reserves of the field may be somewhat less than previous estimates. A comprehensive technical review to quantify the reserves position is underway and should be completed by the end of September 2000.
The Company was also very active in reviewing new business opportunities that would allow it to capitalise on the gas market opportunities in WA and to consolidate its position as a WA gas supplier.
Bligh Oil and Minerals NL advises that the drilling of the Rimu B-1 appraisal well has commenced. At report date, the well was preparing to drill ahead in 12(1/4)" hole, having set 13(3/8)" surface casing at a depth of 109 metres. The well is being drilled 2.4 kilometres south-southeast of the Rimu. A-1 discovery well, which tested 1600 barrels of oil and 5 million cubic feet a day of gas from perforations in the Tariki formation, at a depth of 3607-47 metres. The well is designed to test a subordinate fault block on the Rimu structure, to gain additional information on the areal extent of the Tariki sands, and the possible height of the pay column on the feature. It is defined as a long range step-out, or appraisal well. It is anticipated that the well will be drilled to a depth of 3,750 metres and that drilling will take approximately 24 days.
REVIEW OF EXPLORATION ACTIVITIES
JUNE 2000 QUARTER
KIMBERLEY DIAMOND EXPLORATION
WESTERN AUSTRALIA
JOINT VENTURE: BOW RIVER
During the quarter the Company formally signed the Farmin and JointVenture agreement with Astro Mining NL ("Astro") covering tenements owned by the Company within a 250 kilometre radius of Astro's BowRiver Diamond Mine in the East Kimberley Area of Western Australia. The details of the Agreement have previously been announced and include the issue of 4 million ordinary shares to Conquest and the right for Astro to earn a 51% interest by funding further exploration of at least $5,000,000 or completing or funding a bankable feasibility study.
The heavy cyclonic weather experienced in the Kimberley wet season has delayed the start of the field season in the area. However, at the beginning of June, Astro commenced an active programme of exploration work on the Company's tenements.
LOWER SMOKE CREEK, EAST KIMBERLEY
The company is pleased to announce that during the quarter the formal acquisition of the Lower Smoke Creek exploration ground was completed. This ground will form part of the Astro Farmin and Joint Venture Agreement and provides additional favourable targets for accumulations of economic diamond deposits.
NAPIER RANGE, WEST KIMBERLEY
A detailed review of previous geophysical work and sampling of the company's tenements in the Napier Range was undertaken during the quarter. A number of previous magnetic anomalies have been identified in this area which forms part of the West Kimberley lamproite province at Ellendale. These targets were not sufficiently defined due to the coarseness of data from the previous surveys but sufficient promise exists for them to undertake a modern detailed aeromagnetic survey of the lease holding. This survey and data acquisition will be completed by the end of August 2000.
REPORT FOR THE QUARTER ENDED 30 JUNE 2000
OVERVIEW
CAWSE NICKEL AND COBALT OPERATIONS
Design capacity achieved
* The autoclave operated at 105% of design capacity for month of May 2000 Metal production
* 1,878 tonnes of nickel for the quarter and 5,484 tonnes for the year
* 269 tonnes of contained cobalt for the quarter and 1,023 tonnes for the year
Costs
* Cash operating cost of US$1.88/lb nickel after cobalt credits at US$13.77/lb cobalt
* Project A$11.2 million (US$6.6 million) cash flow positive for quarter at operating level
Exploration
* Delineation of new nickel laterite mineralisation over at least six kilometres of strike at the 100% owned Yowie prospect containing several zones of high-grade nickel mineralisation
* Infill drilling at Cawse Extended continues to identify areas of high-grade mineralisation
Stage II Expansion
* The pre-feasibility study progressed according to schedule the study due to be delivered in August 2000
MT PLEASANT GOLD OPERATIONS
Gold Production
* 30,292 ounces for the quarter and 145,470 ounces for the year
* Commenced treatment of ore from the underground operations
Costs
* Average cash operating cost of A$375 (US$237) per ounce for the financial year
Underground Development
* Higher grade and greater tonnage than forecast mined from the 228
Audit
* Development of two additional Adits (204 and 201) during the quarter
Exploration
* Boundaries of mineralisation extended at Quarters Central
* Outstanding results at Enterprise including 108 metres at 4.0g/t gold from 189 metres depth could lead to an increase of up to 50% in the mineable resource for Enterprise
* Excellent intersection at Scotia Dam (37 kilometres from Mt pleasant) of 6 metres at 90.3 g/t gold from 180 metres depth including 1 metre at 514 g/t gold
OTHER
Financial
* Cash and bullion on hand A$52.2 million (US$31.4 million)
Corporate
* The Company moved to compulsorily acquire the outstanding shares
in Australian Gold Resources Limited and as a result the Company's
issued capital increased to 519,933,690 shares
* The Company announced a 1:10 share consolidation subject to
shareholder approval
HIGHLIGHTS
RECORD ANNUAL GOLD PRODUCTION
Delta Gold achieved record attributable annual gold production of
603,429 ounces at a total cash cost of $282 per ounce (US$169 per
ounce at A$1.00/US$0.60), with excellent performances from its
Australian operations.
KANOWNA BELLE EXCEEDS 300,000 OUNCES - AGAIN
Kanowna Belle produced a record 301,666 ounces in 1999/2000, the
second consecutive year the project has produced in excess of 300,000
ounces.
KANOWNA BELLE COSTS REDUCE
Delta's management of Kanowna Belle has reduced direct site operating
costs per tonne of ore by 10%.
GRANNY SMITH PRODUCES HALF-A-MILLION OUNCES
Granny Smith produced 497,867 ounces in 1999/2000 at a low total cash
cost of $225 per ounce, confirming it as Australia's second largest
and most profitable gold mine.
GOLDEN FEATHER VALUE FROM SYNERGIES
Golden Feather achieved record annual gold production of 135,573
ounces by processing ore through the Paddington and Greenfields
plants, demonstrating the value of synergies from the sharing of
resources by mining companies.
WALLABY HIGH GRADES
Excellent gold grades were intersected in deep drilling beneath the
proposed Wallaby open pit, confirming a major mineralised system open
at depth.
WALLABY CLOSE TO DEVELOPMENT DECISION
The Wallaby Feasibility Study is nearing completion with a
development decision to be considered by the owners in the September
quarter.
TWO-OUNCE GOLD BARS
In association with the Australian Gold Refineries Joint Venture,
two-ounce 99.99% gold bars, stamped with the Delta Gold logo, have
been produced for sale to shareholders and employees.
ELIZABETH HILL SILVER DEPOSIT
Joint Venture participants are:
East Coast Minerals NL 70%
Legend Mining Limited 30%
SUMMARY
* MILLING & SILVER SALES
Treatment of 6,415 tonnes of ore.
Record production of 474,159 ounces of silver from 6,258 tonnes treated.
Headgrade further improved to 0.39% Ag (125 oz/t).
Silver sales of $1.365 million (representing 3 shipments only).
Additional payments for another 5 shipments are due in July 00.
* TAILINGS DAM
Processing of the tailings being examined.
* MINING
A total of 6,912 tonnes was mined.
* SILVER SPECIMEN
Huge silver specimen discovered and put on display at the Perth Mint.
* EXPLORATION
Underground diamond drilling continued. Visible silver encountered.
QUARTERLY REPORT FOR THE PERIOD
FROM 1 APRIL 2000 TO 30 JUNE 2000
HIGHLIGHTS
UNITED STATES OF AMERICA
* Big development gas play gets underway at Clear Branch Field, Louisiana.
* FAR commits to 3-D prospect at Lake Long, Louisiana, targeting 13 Miocene Sands.
* Drilling commences on Texas Oil Prospect
* Highest non-heating season natural gas prices on record.
AUSTRALIA
* Apache appointed operator of EP 395
* Farmin offer proceeds on EP 104
PAPUA NEW GUINEA
Field mapping program over new leads in PPL 213
Fourth Quarter Activities Report
OVERVIEW
NEW GOLD DISCOVERY - COLONIAL PROSPECT
Significant new gold mineralisation has been discovered at the Company's Colonial prospect located 120 kilometres from Kalgoorlie, adjacent to the Carosue Dam gold project being developed by PacMin Mining Corporation Ltd. The first drillhole returned 16 metres at 3.1 g/t gold from 178 metres depth. Further drilling is underway at Colonial with both deep reverse circulation ("RC") and shallow rotary air blast programs ("RAB") planned.
UPGRADED GOLD RESOURCE - SOUTHERN LAVERTON TECTONIC ZONE ("SLTZ")
Resource calculations have been updated at the Saxon Extended gold prospect within the Company's SLTZ project. Contained gold at Saxon Extended has increased by 144% to 170,000 ounces. The Saxon Extended gold resource has an overall grade of 4.02 g/t gold using a cut-off grade of 1.0 g/t gold which represents a grade increase of 36%. Mineralisation remains open to the north, south and at depth. Additional drilling is planned for the September 2000 quarter to extend the gold-bearing system.
NEW MAGNESIUM RESOURCE - FOUR CORNERS/WHITE EAGLE
An Inferred Mineral Resource of 9.6 million tonnes at 38.0% magnesia has been calculated for the Company's White Eagle magnesium prospect within the Four Corners Nickel project. Metallurgical testing of representative ore types is ongoing.
GOLD - RAND PROJECT
Technical assessment of the Rand Project is effectively complete with several priority target areas identified. The issue of appropriate land access is currently being addressed as a matter of priority to allow suitable drill targets to be developed. A regional stream sediment geochemistry program to be undertaken by The Department of Mines along the northern margin of the Amadeus Basin will provide useful information to assist the Company in planning future work on the Project.
GOLD - TANAMI GOLD STRATEGIC ALLIANCE
The strategic corporate alliance with Tanami Gold NL ("Tanami Gold") in the Tanami-Arunta province progressed with the Company's senior geologists reviewing the Western Australian portion of the Tanami belt. Tanami Gold has a number of exploration projects showing encouraging results.
Under the strategic corporate alliance the Company has the right to acquire up to a 60% interest in Tanami Gold's exploration projects. The strategic alliance is for a period of 20 years.
CORPORATE - RENOUNCABLE RIGHTS ISSUE OF SHARES AND OPTIONS
The Company announced a pro rata, one for one, renouncable rights issue of shares at a price of 25 cents per share with a free option attached. Shareholders approved the issue of further options to existing optionholders at an issue price of 1 cent on the basis of one new option for every existing option held. Prospectuses are currently being prepared for these issues and will be available shortly.
EXPLORATION PROGRESS REPORT TO JULY 20,2000
DAIRI PROJECT
Hole SOP25D
Assays have been received for drill hole SOP25D located on section 9800N and up-dip from hole SOP18D. The interpreted mineralised main ore horizon (MOH) at this location, previously announced as possibly thinned due to being fault-affected, returned 4 metres of 5.3% Zn, 3.3% Pb and 17 g/t Ag (including 1 metre of 9.0% Zn, 5.54% Pb and 17 g/t Ag) from 112 to 116 meters down hole depth.
Hole SOP26D
Drill hole SOP26D, located on section 10000N at 5200E and down dip of Hole SOP1D, (21.4% Zn, 12.9% Pb over 6.8 metres) intersected a relatively narrow zone of mineralisation, for which assays are pending.
Hole SOP27D
Drill hole SOP27D, located on section 9900N down-dip of hole SOP23D (15.9% Zn, 9% Pb over 14.5 metres) intersected two zones of mineralisation, for which assays are also awaited. The upper zone contains a 3 metre interval of Zn/Pb mineralisation, and the lower MOH zone is comprised of 14.8 metres of massive sulphide intersection from 210.4 - 225.2 metres down hole depth.
COSMOS
The plant is now operating at close to nameplate capacity of 18.5 tonnes per hour, with recent ore being mined from the 415 to 420 RL level (60 - 65 metres below the surface), near the top of the original planned ore body. Most ore mined over the last three months has been recovered from the supergene and transitional zones above the ore body proper and the high grade of this material has been a significant bonus for us. Average mill feed grades for this period have been 5.6% nickel as against the original forecast of 3.6% to this stage of the project. In addition, over the last month our nickel mill feed grades have averaged 6.7% nickel whilst nickel recoveries have averaged 85.4% compared to the 75% forecast for this stage of the project.
COSMOS DEEPS
The Cosmos Deeps discovery continues to grow to what appears to be a larger size than Cosmos.
Whilst the deposit is open ended along strike and down dip the core of the known mineralisation is continuing to return solid results, including our latest drill hole (JCD117) returning the fantastic 14.1% nickel over 12.lm from a depth of 615.4m, our best result to date from Cosmos Deeps.
We plan to continue drilling Cosmos Deeps over the next quarter including step-out drilling within and along the mineralized trend in order to produce an initial geological resource in September or October. Most likely by this time we will not have closed off the deposit, however we need to quantify an initial underground resource to fit in with our ongoing development plans.
OVERVIEW
GOLD - VIOLET TOWN PROJECT, CENTRAL VICTORIA - four tenements were granted allowing exploration to commence on the eastern half of the Project area.
GOLD - RAND PROJECT, NORTHERN TERRITORY - land access is being addressed as a priority following the completion of the technical assessment which supports the application of the Witwatersrand exploration model in the Amadeus and Ngalia Basins.
GOLD - DUKETON AREAS, WESTERN AUSTRALIA - exploration was limited to field checking of target areas in preparation for drill testing early in the next financial year with the mine sequence north of Rosemont being identified as a high priority target.
Second Quarter Activities
MUNNI MUNNI/ ELIZABETH HILL SILVER PROJECT
(Legend Mining Limited 30% East Coast Minerals NL 70%)
* Record production of 474,159 ounces of silver from 6,415 tonnes treated.
* Headgrade, further improved to 0.39% Ag (125oz/t).
* Silver sales of $1.365 million (representing 3 shipments only, additional payment for another 5 shipments are due in July 00).
* Huge silver specimen discovered and put on display at the Perth Mint.
Second Quarter Activities Report
The main developments during the quarter were as follows:
* The drilling program completed at the proposed Twin Hills Mine defined additional mineralisation both within the proposed open pit and to the south of the proposed pit. In addition, much of the new mineralisation is near surface or at shallow depths. It was earlier announced that updated ore reserves would be available by mid July. These are now expected at the end of July/early August.
* A new high grade zone, 30 to 50m west of the main high grade zone, has been traced over a north-south interval of 80 metres and is open to the south and perhaps also the north. Drill holes which intersected this zone include 242, 243, 244, 245, 291,292, 293, 295, 296, 297, 298 and 299. For example, hole 242 which was drilled to 38m depth intersected 113 g/t Ag over the entire length of the hole, including 4m between 32 and 36m of 260g/t Ag. Hole 299, which was a 60m hole intersected 149g/t Ag over the entire length of the hole including 8m at 475 g/t Ag between 38 and 46m. High grades extend right to surface as indicated by hole 244, which between 0 and 4m contained 197g/t Ag; and hole 246, which between 0 and 22m contained162g/t Ag.
* A second new zone within the proposed pit, referred to in the last quarterly report as 75m WSW of hole 145 (hole 145 is part of the original high grade silver zone), was extended a further 50m northwards by intersections in holes 281, 288 and 289. For example hole 289 intersected from 0 to 34m, 178g/t Ag (0 to 22m was 236 g/t Ag).
* Just south of the southern limits of the proposed pit all entirely new zone was tentatively defined by holes 305, 306, 307 and 308 - over a strike distance of approximately 100m. For example hole 305 intersected 64m (entire hole) of 123 g/t Ag including 18m (42 to 60m) at 334g/t Ag.
* During the quarter MACMIN acquired the Silver Spur Mining Lease (ML 5932) from Rimfire Pacific Mining NL (Rimfire) for a consideration of $30,000.00 cash and 500,000 MACMIN shares. This lease of 182 hectares is 2 km SSE of the proposed Twin Hills Mine; and is in the centre of MACMIN'S 351.4 square kilometres of land holdings (granted or under application) at Texas. It represents a very significant acquisition in terms of MACMIN'S long term resource development strategy for the Texas area.
The lease has potential to add ore for the Twin Hills Mine; to form a zinc/silver mining operation in its own right; and to provide revenue to MACMIN from the treatment of 90,000 tonnes of zinc rich slag (in heaps at surface) which contain 15.8% Zn and 158g/t Ag. In addition, it will provide a valuable source of water for the Twin Hills processing plant.
* The second and third drafts of the EMOS (Environmental, Management, Overview, Strategy) were submitted to the Department of Mines and Energy (DME). Although it is difficult to predict when the EMOS will be accepted by the DME we believe approval is imminent.
* Initial discussions have been held with potential lenders for the capital cost of the Texas Project. It would appear that funding for the project will not be a problem.
* The purchase of the two main farms covering the project area was completed.
* Agreements reached on principal terms to acquire mining leases, equipment and plant at Broken Hill.
* Opportunity for early cash flow from existing silver-lead-zinc open cut resources and stockpiles.
* Significant potential for large tonnage resources in parallel lodes and at depth beneath the central Broken Hill orebody.
Redfire Resources Ltd has announced that it will acquire a major position in the world class Broken Hill Silver-Lead-Zinc minerals field and agreed to purchase a process plant designed to treat Broken Hill ore.
Redfire has reached agreement on principal terms to acquire from Normandy Mining Investments Pty Ltd, the Consolidated Mining Lease No 7 (CML 7) title, which covers the central 3.8 kilometres of the Broken Hill orebody.
CHINA DIAMOND EXPLORATION
The Company, in joint venture with Astro Mining NL, has interests in diamond exploration projects in China through the Quantum-Astro Joint Venture ("QAJV"). The QAJV has a majority interest (51% to 70%) in joint ventures with the remaining interest held by the Chinese Provincial Bureaus of Geology and Mineral Resources ("BGMR").
SHANDONG
Field programs continued in the June 2000 quarter with over 200 drainage samples being collected from the Mengshan area. This area lies south east of the producing Pipe 701 diamond mine and has had no previous exploration having being located within a military reserve. Past sampling of drainages from this rugged range of granite hills had shown a number of indicator mineral grains with good kimberlite chemistry. Several years ago, local farmers discovered a two carat rough diamond in drainage from an area within the exploration licence block.
INNER MONGOLIA - ORDOS BASIN
Field inspection of several aeromagnetic targets identified by the QAJV geophysicist Dr Jason Meyers commenced during the June 2000 quarter. Whilst several anomalies were eliminated on the basis of cultural features such as major buildings, thirty remain unexplained in covered areas of the Ordos Basin.
LIAONING
Discussions continued with the Liaoning BGMR on an extension to the exploration period.
2000 SECOND QUARTER REPORT
SECOND QUARTER HIGHLIGHTS
The following results were achieved compared with the 1999 second quarter:
* Sales revenue increased by 63.1% to $376.8 million (quarterly record)
* Production volume increased by 17.8% to 14.2 million boe (quarterly record)
* Sales volume increased by 14.1% to 14.6 million boe (quarterly record)
* The oil price received averaged US$26.53 (A$44.33) per barrel (1999: US$16.13 (A$24.79) per barrel)
FIRST HALF HIGHLIGHTS
First half highlights compared with 1999 are as follows:
* Sales revenue increased by 72.6% to $712.4 million (first half record)
* Production volume increased by 14.8% to 27.7 million boe (first half record)
* Sales volume increased by 16.0% to 27.6 million boe (first half record)
In accordance with Listing Rule 3.1, Tap Oil NL advises that the Linda-1 exploration well spudded at 02.30 hours on 17 July 2000
LOCATION
The well is located in TL/1, 17.5 kilometres north-east of Varanus Island at latitude 20 deg 32' 54.13"S and longitude 115 deg 41' 48.36"E.
PROGRESS
As at 6.00am, the well has drilled ahead to 2,776 metres measured depth. The well has encountered a 91 metre gross hydrocarbon column from 2,659 metres to 2,750 metres measured depth. This column is above the prognosed reservoir section expected at approximately 2,787 metres. The well is preparing to drill ahead to the planned total depth of 3,132 metres measured depth.
The nature and extent of the accumulation will be evaluated on reaching TD which is expected later this week.
HIGHLIGHTS:-
* Continued high production at Radio Hill.
* Cash Costs for your averaged US$0.66 per pound of nickel.
* BioHeap(TM) development showing excellent early results.
HIGHLIGHTS
BULCHINA MINE, SANDSTONE
* Pit re-optimisation increases Bulchina Ore Reserves by 50% - with the southern section of the Resource still to be drilled out.
* Record quarterly gold production from Bulchina, with 16,139 ounces produced, at a cash cost of A$149 per ounce.
* Annual Gold Production of 47,803 ounces from Bulchina at a cash cost of A$157 per ounce.
* Total gold production of 78,642 ounces for the financial year ended 30 June 2000, comprising Bulchina 47,803 ounces and Cornishman 30,839 ounces.
* Mill through-put increases by up to 50% made possible by plant upgrade.
* Significant intersections from first-pass drilling at a number of regional exploration targets at Sandstone:
15m @ 5.6g/t Au;
4m @ 17.87g/t Au; and
19m @ 4.3g/t Au.
* Significant intersection of 2m @ 78.36g/t Au at the Piccadilly Prospect 4 kilometres south of the Bulchina Pit.
PEAK HILL
* Two significant intersections at prospects in the Peak Hill Project area:
20m @ 7.08g/t Au (Eclipse); and
10m @ 4.95g/t Au (Murphy Creek).
CORPORATE
* Cash position of $8.9 million in cash, plus 7,708 ounces of refined gold awaiting sale and equity investments with a market value of $1.4 million.
HIGHLIGHTS
* 15,013 ounces of gold produced during June quarter.
* 41,820 tonnes @ 15.4 g/t Au mined during quarter.
* Allstate announces rights issue to raise A$1.41 million.
* Macquarie Bank debt reduced to A$19.50 million.
BEACONSFIELD MINE JOINT VENTURE
Allstate 51.51% and Manager (Beaconsfield Gold NL 48.49%)
OVERVIEW
Gold production for the quarter was 15,013 ounces, a further improvement from the previous quarter's 14,076 ounces but still well below expected production levels. Poor mechanical reliability aggravating under-performance from the bacterial oxidation section of the treatment plant remains the key difficulty in reaching targeted production, although modifications to the bacterial oxidation reactor agitation and air sparging systems (commenced in June) appear to have resulted in much improved process performance. The gravity and flotation sections of the plant are operating satisfactorily.
Underground operations are progressing well, with 41,820 tonnes @ 15.4 g/t Au mined during the quarter.
MINE DEVELOPMENT
Total waste development in the June quarter was 694 metres, including 139 metres in the decline. Decline development is now at 605 metres below surface, with the mining of orebody access drives on the 605 ml in progress in July 2000.
A total of 41,820 tonnes @ 15.4 g/t Au was mined from stoping operations, with production predominantly from the central section of the orebody. Stoping methods remain under review, with key issues being the amount of ore dilution and the level of mechanisation achievable. A recent switch to mechanised "half upper" stoping has proved successful in some areas. Mining of the western section of the orebody is progressing slowly, awaiting completion of dewatering boreholes currently being drilled from the 580 ml.
Fourth Quarter Activities - HIGHLIGHTS
Fourth Quarter Activities - HIGHLIGHTS
Exploration cash expenditure in the quarter under review amounted to $1,546,000.
IRON ORE
As recently reported almost 15,000 metres of RC and diamond drilling was completed at Hawks Nest with the objective of upgrading to reserve status sufficient of the known iron ore resources to provide at least 20 years' feed for the proposed SASE pig iron project.
A commercial assay laboratory is currently analysing drill core and chip samples from the programme and AuIron expects iron ore reserve estimates based on the drilling to be available in early August 2000.
COAL
The recent programme also included additional drilling for large diameter core samples for smelting tests of the Ingomar coal deposit. Ingomar lies within the Company's 5 billion tonne Phillipson coalfield. The intersected coal is 4m closer to surface than in previously delineated contiguous areas. As a result, the amount of overburden stripping required to open up the deposit will be reduced.
DEMONSTRATION PLANT
The Demonstration Smelter now under construction at Whyalla is on schedule and budget and nearing completion. Commissioning is stated to start early August.
OPTIONS TO DIRECTORS AND STAFF
The Board advises that it will be placing before shareholders, for approval at the AGM to be held on 8 September, a recommendation to allot options to directors and staff, designed to retain and motivate key people, during the important development phases ahead.
Full details currently being finalised will be included in the notice of meeting. In summary it is proposed that a total of 5,300,000 options exercisable at 77 cents with an expiry date in September 2005 be recommended.
CALLION
Four RC holes were completed at Callion, beneath the old Rowe Pit to test for continuation of the high grade Callion gold mineralisation.
A series of steeply dipping silica/quartz veins of 2 to 10m thickness were intersected in all four holes, with sulphide mineralisation up to 20% present in the mafic units adjacent to the veining. Assay results are pending.
The Callion project formed part of the Davyhurst acquisition.
MERTONDALE
Infill soil sampling was completed at the Mertondale prospect located 40 kilometres NE of Leonora.
This work has confirmed and provided better definition of the 4,000 metre long zone of gold anomalism at Mertondale with results showing sharp peaks of up to 60 ppb gold over consecutive samples. A 1,500m RAB program has been proposed to test these encouraging soil anomalies.
COWARNA ROCKS JV
The Cowarna Rocks JV represents a major new exploration project. The 376 sqkm project is located 80-110 kilometres east of Kalgoorlie. Croesus is operator of the joint venture and has the right to earn 80%.
Exploration on the Cowarna Rocks JV consisted of soil sampling and first pass RAB drilling on existing soil anomalies. Infill and reconnaissance soil geochemistry sampling revealed several zones of slightly elevated gold and nickel. Maximum gold, copper and nickel values were 18 ppb, 203 ppm and 284 ppm respectively. The background gold level was 5 ppb.
RAB drilling (COW 001-069) was completed on low order soil anomalies and geophysical targets. Holes were drilled on selected lines and 100m centres to test the gold and nickel (laterite and sulphide) potential of the Archaean sequence marginal to the regional Avoca Fault and associated splays.
Results received to date include a best result of 5m @ 29 ppb Au from 20m in the last hole of the program COW 069. Only very limited parts of the project area have been tested and further RAB drill targets are planned for testing.
PRODUCTION STATISTICS - BINDULI GOLD MINE
| JUN 00 QUARTER |
PREVIOUS QUARTER |
1999/00 FINANCIAL YEAR |
||
| Ore Mined | (t) | 86,372 | 83,004 | 555,905 |
| Ore Processed | (t) | 168,009 | 153,935 | 586,947 |
| Mill Head Grade | (g/t gold) | 2.12 | 2.21 | 2.65 |
| Recovery | (%) | 94% | 94% | 93% |
| Fine Gold Production | (oz) | 10,789 | 10,325 | 46,717 |
| Cash Cost | (A$/oz) | $314 | $302 | $284 |
FORT WILLIAM
Feasibility studies and reserve definition drilling are planned for the Fort William deposit at Binduli. If results are positive as anticipated then the Fort William deposit would be developed later in the year with ore trucked to Hannan South.
1999/00 FINANCIAL AND PRODUCTION SUMMARY
PRODUCTION 2000/01
GME and NiWest Ltd, a subsidiary of Western Metals Ltd, have signed an agreement providing for the sale of GME's lateritic nickel tenements to NiWest in return for a 40% interest in NiWest.
The transaction is subject to a number of conditions, including approval by the shareholders of GME. This will be sought at an Extraordinary General Meeting to be held at 10 am on 31 August 2000 at the Broadwater Pagoda Hotel, Como.
Under an agreement entered into on 20 July 2000, Greenstone is to sell certain mineral interests associated with its Ravensthorpe (WA) project area.
The Company has for some time owned rights to minerals below 35 metres from surface on a tenement around North Bandalup. The area includes the Shoemaker-Levy deposit of the Ravensthorpe Nickel Project Joint Venture between Billiton plc (through a subsidiary), Comet Resources NL and others.
Greenstone is to sell those rights and certain minor associated tenement interests to Billiton Nickel (Ravensthorpe) Pty Ltd, a subsidiary of Billiton plc, for $2.1 million. The Company considers the sale to be the best way of realising value for the asset. The sale is conditional upon the waiver or non-exercise of pre-emptive rights held over the interest by a third party, and obtaining Ministerial approval to the tenement transfer. The sale will be completed in early September 2000.
This divesture does not diminish the exploration prospectivity of Greenstone's tenement holding around Ravensthorpe, where there are significant opportunities for nickel and base metal discovery.
The Company is continuing to evaluate new business proposals and will be in a much better position to pursue any suitable opportunities as a result of this sale.
HIGHLIGHTS DURING THE QUARTER
SUMMARY
Against an industry background of unsettled commodity prices and limited interest in resources, the Company maintained its consistent focus on exploration within Australia.
At the Middleback Ranges in South Australia, access negotiations with BHP and clearances from local aboriginal groups were finally completed and diamond drilling commenced at the Iron Princess anomaly during the quarter. The Iron Princess anomaly exhibits strong gold and copper surface geochemistry and contains an untested coincident gravity and magnetic anomaly at depth. The first diamond drill hole, PRCD 1, was precollared to 220 metres with percussion drilling (through strongly weathered and altered overburden) and diamond drilling has continued through to 300 metres. The final depth of the drillhole is planned for 600 metres and the source of the coincident geophysical anomaly is expected between 300 metres and 450 metres. The drilling program will test several other features in addition to the Iron Princess anomaly.
Also during the quarter, Anglogold Australasia Limited, as manager for the Gawler Craton Joint Venture, reported on the RAB drilling completed at the Tunkillia anomaly near Lake Everard in South Australia. A new geochemical gold anomaly grading up to 3.6 g/t gold from RAB drilling has been defined in a previously untested dilational structure within granite. The discovery provides the impetus for an immediate reverse circulation (RC) drilling program to commence in August and test the potential of any primary mineralisation below the RAB drilling.
At the Biscay Project near Halls Creek in Western Australia, the Company has completed its extensive soil and outcrop gold geochemical sampling program. The results have produced two coherent anomalies which will be drill tested in late July.
In addition to the above exploration, the Company has maintained its continuous review of the potential for platinum group metals in Australia. As a result of this review, the Munni Munni platinum project near Karratha in Western Australia, will be thoroughly evaluated from its existing exploration database (including using current metal prices). Helix holds an 80% equity in the Munni Munni project although the titles are the subject of a plaint lodged in the Wardens Court in 1997 prior to Helix's involvement. Negotiations are underway to purchase the remaining 20% in Munni Munni held by Hunter Resources Limited and Helix intends to prepare and manage the case to be presented to a future Warden's Court hearing.
Also, as part of the Company's platinum review, the Panton Sill platinum project was sold in entirety to Platinum Australia Limited (PAL), a wholly owned subsidiary of Swiftel Limited. The sale of Panton Sill (which is subject to a minimum $3.5 million IPO) will enable PAL to further evaluate this exciting project whilst providing Helix with a 13.5% equity in the company's shareholding and allowing Helix to concentrate on the Munni Munni Project.
June Quarter:
Lachlan is 81.2% owned by Homestake Mining Company. Homestake Gold of Australia Limited manages all Lachlan's exploration and development activities.
FINANCIAL
As at 30 June 2000, cash on hand and at deposit was $3.5 million. Additionally, Lachlan owns mining securities with a current market value of $118,000 held for sale. Exploration and evaluation expenditure for the quarter was $197,630.
CORPORATE
BLACK RANGE
(Lachlan 90%)
Kalgoorlie Metals Pty Ltd have been granted a 12 month option to purchase the Black Range project commencing 16/5/00. Under the terms of the option agreement, Kalgoorlie Metals will pay Lachlan $5,000 and be obligated to spend $30,000 on exploration of the tenement within one year. Should Kalgoorlie Metals exercise the option it will pay Lachlan $30,000 plus a royalty on lateritic nickel ore produced from the tenements.
EXPLORATION
MT GOODE PROJECT
(Lachlan 100%, subject to 25% NPI in favour of Forsayth NL)
Work in the June quarter consisted of reviewing the results of the recent geophysical surveys and the planning and commencement of a diamond drilling programme to further test the sediment-ultramafic contact in the north of the project area.
Down-hole EM surveys conducted in the diamond holes drilled last quarter did not identify any major off-hole conductors.
A programme of four RC/DD holes was underway at the end of the quarter to test the western (basal) sediment-ultramafic contact in the northern part of the Mt Goode prospect . All holes will be tested with downhole EM to detect any off-hole conductors.
BALCOOMA PROJECT
(Lachlan 100%)
Work during the quarter focussed on the Clinker prospect, with geological mapping and a short RC drilling programme completed.
Four holes were drilled (CRC03-CRC06) for 696 metres. All holes were drilled towards grid east to test a chlorite alteration zone delineated by soil zinc geochemistry, ground magnetics and the previous two holes completed in December 1999. All holes intersected the targeted zone with the best visual mineralisation occurring in hole CRC06 followed by that in hole CRC03.
Preliminary assays have been received for the 4m composite samples for the first two holes. Hole CRC03 intersected 46m of anomalous base metal mineralisation (>1000ppm zinc) between 120-166m. The best intersection was 4m of 4340ppm Zn, 2160ppm Pb and 2ppm Ag between 160-164m.
The exhalative units and chloritic alteration zones within the felsic wacke unit have only been tested by our six (6) drill holes. The total strike length of these prospective rock units, as outlined by previous stream geochemistry, is about 5km. This prospective felsic wacke unit occurs to the west of the main Clinker alteration zone which was the target for exploration prior to 1999. The untested portions of the 5km long felsic wacke unit remain prospective for massive base-metal sulphides.
HIGHLIGHTS - June Quarter
June Quarter - Summary:
TASMANIA
Re-interpretation of seismic data from Permit T/31P located in the Strahan Sub-basin of the Sorell Basin, offshore western Tasmania was completed. The Permit has good petroleum prospects and is sited along the petroliferous Southern Breakup Margin of Australia. The area is being offered to prospective farminees. It contains four structures individually large enough to contain in place oil from 250 million to one billion barrels.
NORTHERN TERRITORY
As previously reported, Permit NT/P56, in which a number of prospects have been identified, occupies the eastern portion of the Troubadour - Sunrise High, the western part of which contains multi-trillion cubic feet of gas condensate fields. It is covered by a 10 kilometre by 3 kilometre seismic grid supplemented by more detailed coverage over the south west portion of the Permit.
This south west portion of the Permit is considered to have prospects for oil accumulation. The Dove Prospect which is part of the large 56-8 structure is sufficiently large to contain 700 million barrels of in place oil. This prospect has fault independent closure.
Attempts to farmout the area are continuing.
QUEENSLAND
Queensland Gas Company Ltd has farmed into Petroleum Lease Application 171 and Authority to Prospect 465P. Under the terms of the farmin agreement, Queensland Gas, subject to the raising of funds by a public issue, will drill a minimum of two wells to evaluate the coal seam methane productivity of the Walloon Coal Measures. Presently, the prospectus has been registered and the public issue underwritten.
Cash in hand including deposits at the end of the quarter was $1,514,000. In addition casing and tubulars to be used in the drilling and completion of wells are held in stock.
The price of oil has remained at high levels. Despite this, many large companies have not increased their exploration budgets for the Australian region. Nevertheless, the Company has excellent offshore acreage with good prospects for large petroleum accumulations and hence its efforts to farmout these areas should be successful.
June Quarter - Summary:
MINERAL EXPLORATION
NORTHERN QUEENSLAND
HODGKINSON GOLD PROJECT
West of Cooktown - Strike as Manager earning Interest from BHP Minerals Pty Ltd
Detailed interpretation of the recently acquired, low-level, airborne geophysical data for the Kennedy - Fine Gold Creek area was completed in concert with satellite imagery data. A number of target areas were recommended for ground follow-up.
BLACKS CREEK GOLD PROJECT - EPM 8994
Northwest of Mount Garnet - Strike 100%
Geological mapping and geochemical soil sampling have indicated possible minor surface extensions of the Nymbool Porphyry Copper - Gold Prospect held by Strike immediately to the south.
SOUTHERN QUEENSLAND
YARROL GOLD PROJECT - EPM 8402
Southeast of Monto - Strike 100%
Detailed logging of oriented diamond core from the project area continued in order to better understand the controls on high grade mineralisation.
MOUNT STEADMAN GOLD PROJECT - EPM 12834
South of Mount Perry - Strike 100%
Detailed geological mapping continued along with re-appraisal of the detailed ground magnetic data. A number of linear structural targets have been recommended for ground follow-up.
SILVER STAR POLYMETALLIC PROJECT - EPM 9504
North of Monto - Strike earning 85%
Ground magnetics were completed over a northwest extension of the existing grid to better define the magnetic low feature visible in airborne magnetic data and to establish its relationship with mineralisation.
EXPLORATION ACTIVITIES
JERVOIS PROJECT (MIM EARNING UP TO 70%)
During the Quarter, exploration at the Jervois base metals project continued via the farm in joint venture, reported previously. with MIM Exploration Pty Ltd [MIMEX]. Under the terms of the joint venture MIMEX can earn a 70% interest in the joint venture tenements which includes the Britannia leases and two adjacent exploration licences, EL9518 and ELA10419 covering 117sqkm. MIMEX is required to expend $4 million over a five year period to earn 70% with a minimum expenditure of $500,000 before withdrawal. Should MIM earn its 70% equity, Britannia's retained interest will include 30% ownership of EL9518 and ELA10419.
MIMEX have reported that in addition to the thirteen 2-km lines of MIMDAS MT/IP that were reported in the April quarter another five 2-km lines were completed during this quarter for a total of 36 line km. These were mostly targeted across the main lode zone, in the northern half of EL9518, the lode zone at Bellbird, and over two magnetic anomalies present in the hinge of the Jervois "J" structure. Interpretation is ongoing with plans to drill numerous chargeable and/or conductive anomalies commencing early August 2000.
To June 30th MIM had expended in the vicinity of $400,000 on the Jervois Project. Budgeted expenditure for the 2000 - 2001 annual period is of the order of $0.95M - conditional upon exploration results.
YARINGA POTASH PROJECT - (100% OWNERSHIP SUBJECT TO GRANT)
During the period the Company relinquished its option to acquire Exploration Licences 09/912 and 09/913 and its applications for Exploration Licences 09/991 and 09/992. The results obtained from drilling the Yaringa East hole in the previous quarter suggest that the deeper sections of Yaringa evaporite basin lie to the north and west of the Yaringa East drill hole location. Thus the licences held were surrendered in favour of four new licence areas thought to be more favourably located for the discovery of Potash mineralisation. These include ELA's 09/1028, 09/1029, 09/1033 and 09/1034 covering some 638sqkm. Three of the licences are located within the Shark Bay World Heritage Area with one (E09/1033) outside. The licences within the Heritage Area if granted would be subject to strict environmental and operating conditions.
DANDARAGAN POTASH PROJECT
Metallurgical testwork completed during the period indicated that high recoveries of Potash could be obtained by leaching of Dandaragan glauconite concentrates with sulphuric acid. However the process is non-selective at this stage and results in considerable dissolution of iron and other salts which contaminate the Potassium sulphate product. Further trials are being conducted to improve on the selectivity of the process leading to purer product and lower acid consumption.
OTHER ACTIVITIES
Exploration activities on the Company's other prospects during the quarter were confined to minimum expenditure requirements.
HIGHLIGHTS
On average, oil sales during the financial year ending 30 June 2000 have averaged AUD38.00 per barrel as compared to AUD22.00 during the previous financial year. During the present quarter, the average price realised was approximately AUD48.00 per barrel.
As a result of the higher oil prices, Beach achieved a 255% increase in Oil Sales Revenue for the quarter compared to the previous corresponding period with an overall 193% increase for the 1999 - 2000 financial year.
While full year results are not yet available, unaudited management accounts for the 11 months to the end of May 2000 indicate a profit of approximately $2.2 million before Abnormal Items and Taxation compared to a loss of $1.4 million for the previous corresponding period.
At the end of the financial year ended 30 June 2000, Beach held cash reserves of approximately $11.5 million.
Fourth Quarter Activities Report as at June 30 2000
* 1999/00 full year profit of $1.3 million.
* 1999/00 Gold production of 46,717 at a cash cost of $284 per ounce.
HIGHLIGHTS THIS QUARTER
Gold production of 10,789 ounces at a cash cost of $314 per ounce
Cash reserves are $20.1 million after settlement of the Davyhurst purchase for $2.91 million
Navajo South open pit prestrip commenced at Binduli
Davyhurst acquisition was finalized and 13,500 metres of diamond, RC and RAB drilling completed to date
Significant Drill results from Giles Prospect at Davyhurst
* 40m @ 4.1 g/t Au
* 15m @ 4.5 g/t Au
* 10m @ 20.2 g/t Au
QUARTERLY REPORT TO 30 June, 2000
HIGHLIGHTS
Zambia : Lumwana Project (Equinox – Phelps Dodge) :
Zambia : Zambezi Joint Venture (Equinox – Anglo American)
Sweden : Billiton – Equinox Alliance to explore for Iron Oxide Cu-Au in Norrbotten
Corporate Finance
Gindalbie Gold NL has announced that the Company had commissioned a bankable feasibility study into the development of the Minjar Project and that Macquarie Bank Ltd has agreed, subject to the finalisation of formal documentation, to provide up to $1M in credit approved finance to assist with the financing of the study.
The study is expected to be completed within 6 months and will include the selection of a suitable gold treatment plant for purchase and relocation to site.
The initial mine life of the Minjar Project will be 3 years with a throughput of up to 500,000 tpa. The Minjar Project comprises 256,300 oz of Measured and Indicated Resources from 4 separate pits.
Under an agreement entered into on 20 July 2000, Greenstone is to sell certain mineral interests associated with its Ravensthorpe (WA) project area.
Greenstone is to sell those rights and certain minor associated tenement interests to Billiton Nickel (Ravensthorpe) Pty Ltd, a subsidiary of Billiton plc, for $2.1 million. The Company considers the sale to be the best way of realising value for the asset. The sale is conditional upon the waiver or non-exercise of pre-emptive rights held over the interest by a third party, and obtaining Ministerial approval to the tenement transfer. The sale will be completed in early September 2000.
Summary - Fourth Quarter:
BURNSIDE PROJECT
Field access has been re-established following the cessation of the annual wet season in the Northern Territory. Reverse circulation drilling has recommenced immediately at the Bon's Rush prospect, and preparation for RAB drilling programs throughout the wider Mt Paqualin area are advanced.
REGIONAL EXPLORATION
Mt PAQUALIN
A significant zone of near-surface high-grade mineralisation has been identified at Bon's Rush in the Mt Paqualin area, located 30km north of the Northern Gold Burnside treatment facility. Preliminary new results include:
BRRC020 15m @ 4.46g/t from 28m
BRRC022 12m @ 5.10g/t from 57m
These results follow on from previously announced results returned late in the 1999 field season. Better results from this earlier program of drilling included:
BRRC010 15m @ 5.95g/t from 19m
BRRC012 5m @ 2.49g/t from 56m
BRRCO8 2m @ 2.7lg/t from 25m
BRRC016 3m @ 4.55g/t from 19m
To date 100m spaced traverses have been completed over a 400m strike length of the prospective ground. Mineralisation has been intersected on all five drill traverses completed to date, and remains open along strike to the north and south, and at depth. It is apparent from these new results that Bon's Rush has the potential to develop into a significant mineralised position. Drilling of this mineralised position will continue to step out to the north and south to test the remainder of the 900m long originally targeted RAB anomaly.
The mineralisation is hosted by a north-northwest shear zone and is associated where fresh, with quartz or quartz-carbonate, pyrite and arsenopyrite veins within the Upper Zamu Dolerite sill between the Upper Koolpin and Gerowie Tuff Formations. The Mt Paqualin area was specifically targeted during the 1999 field season as having the potential for higher-grade mineralisation hosted by the Zamu Dolerite and the Koolpin formation.
NEWS RELEASE
Anglo American plc ("Anglo American") announces a recommended takeover bid for North Limited ("North").
The offer price is A$4.20 per share in cash, equivalent to a market capitalisation of A$3.1 billion (US$1.8 billion). In addition, prior to the closing of the offer, North will declare and pay a fully franked dividend of A$0.05 per share to existing shareholders.
The North Board has indicated it will unanimously recommend this bid to its shareholders.
Anglo American's offer is subject to certain conditions, including Anglo American acquiring more than 50% of North shares and receiving approval from the Australian Foreign Investment Review Board. The conditions are outlined in the attachment to this release. Anglo American's Bidder's statement will be lodged as soon as possible. Anglo American will make the offer through a wholly-owned Australian subsidiary. The acquisition will be financed through new borrowing facilities arranged by Anglo American.
Summary - Fourth Quarter:
SIGNIFICANT EVENTS
A total of 58,181 ounces was produced at Tarmoola for the June quarter, up 7% on the previous quarter and 9% on the previous corresponding quarter, bringing total production for the year ended 30 June 2000 to a record 230,357 ounces. Production loss due to rain was greatly reduced this quarter compared to the previous quarter, however pit base activity interference was experienced in April due to large volumes of groundwater ingress caused by the previous quarter's heavy rainfall.
Over the next two quarters gold production at Tarmoola will be reduced from current levels as the next planned phase of waste removal to access ore from higher levels in the pit is coordinated with the completion of ore removal from lower levels. The orebody at higher levels contains above-average quantities of lower grade ore, with the grades increasing with depth. In the second half of the year Tarmoola's gold production will resume to the current levels, which combined with gold production from the Carosue Dam Project, is expected to result in record gold production for PacMin in 2000/01.
Cash operating costs for the quarter were A$292 per ounce, remaining consistent with forecasts and down 2% on the previous quarter.
The owner-mining fleet expanded to include ancillary mining equipment and trucks during the quarter. Mining costs in this quarter, compared with previous quarters with similar volume movements and mining levels in the pit, demonstrate a reduction in unit mining costs as originally forecast in the Tarmoola owner-mining feasibility study.
At the Ursus Project, follow-up reverse circulation drilling at three prospects has confirmed that the Ursus trend is a major mineralised structure. At the Eclipse prospect, a potential shallow oxide resource has been identified that may provide supplementary mill feed and extend the ultimate mine life of Tarmoola. In addition, results at the other prospects indicate significant additional potential with intersections such as 12m @ 4.25g/t (USC0032), 8m @ 4.01g/t (USC0056), 5m @ 4.11g/t (USC0071) and 18m @ 2.07g/t (USC0076) being returned.
At Wilson Creek, wide spaced reconnaissance RAB drilling along strike of the recently discovered Thunderbox deposit has identified a 3.5km long and up to 300m wide gold anomaly in regolith. Results returned include 4m @ 1,010ppb (WCRB459) and 4m @ 762ppb (WCRB476). Further drilling is planned to determine the primary source of the anomalism.
Engineering design and construction of the 1.8-2.0Mtpa plant and surrounding associated infrastructure remain in line with the feasibility study timetable. A short term hourly hire pre-strip mining contract was awarded during the quarter with equipment and personnel being mobilised to site in the last week of June. Pre-strip mining commenced at the beginning of July in line with the mine plan.
Fourth Quarter Activities and Cashflow Reports
EXPLORATION
WESTERN AUSTRALIA
YILGARN EXTENSION PROJECT
Negotiations are at an advanced stage with a potential joint venture partner on the Beete tenements of the Yilgarn Extension Project. This joint venture would focus on following up the Archaean bedrock gold mineralisation delineated by Pan Australian during its regional exploration. It is envisaged that this joint venture will be concluded by the end of the September Quarter.
STEERE RIVER PROJECT
Potential joint venture parties have reviewed the exploration database at the Steere River Project where Pan Australian has defined significant base metal geochemical anomalies within the Proterozoic units.
GRASS PATCH PROJECT
At the Grass Patch Project (Joint Venture with BHP Minerals) a 7,000 metre aircore drilling program was completed during the Quarter to test combined geophysical-geochemical targets defined by Pan Australian and BHP in their respective regional exploration surveys of the Proterozoic aged Albany-Fraser Province.
The aircore drilling program was completed over both the joint venture ground and the wholly held BHP tenements. The results of the drill program are presently being compiled by BHP.
DARLOT SOUTH PROJECT
This Project is located immediately south of the Darlot-Centenary gold mines and is a joint venture with Homestake Gold of Australia.
During the Quarter, Homestake completed a six-hole reverse circulation drill program for a total of 1,740 metres. These drill holes were located on the Darlot South M37/343 tenement and were planned to test a magnetic dolerite unit for Centenary style mineralisation to a nominal depth of 300 metres.
Interpretation of the drilling results identified a north dipping doleritic sequence with complex layer parallel thrusting and sub-vertical faulting. The drilling failed to intersect any significant gold mineralisation.
A separate IP geophysical survey over the Furman's Prospect failed to identify any obvious drill targets.
QUEENSLAND
CAMERON RIVER - HAPPY VALLEY PROJECTS
During the Quarter Pan Australian and Universal Resources Pty Ltd finalised negotiations on the proposed sale of the Company's interest in the Cameron River and Happy Valley Projects. The agreed sale terms include the issuance by Universal of 725,000 shares at an issue price of 50 cents, which will be allocated to Pan Australian on completion of the proposed public float and listing of Universal on the Australian Stock Exchange.
MT OLIVE PROJECT
The Project area hosts several drill indicated copper oxide deposits which are too small to support a stand alone mining operation.
Consequently, during the Quarter, Pan Australian agreed to the transfer of the Mt Olive Project to Murchison United in return for a 1.5% royalty on gross copper production.
The Project is located adjacent to the Mt Cuthbert Copper Heap Leach SX-EW operation, and there is potential for the processing of the Mt Olive's small deposits at the Mt Cuthbert operation.
Murchison United have recently sold the Mt Cuthbert Mine to Matrix Metals Limited. Pan Australian retains its 1.5% royalty interest in the Mt Olive Project.
Report on Activities for the Quarter ended 30 June 2000
OVERVIEW
BAYU-UNDAN PROJECT
ELANG/KAKATUA/KAKATUA NORTH OIL FIELDS
EXPLORATION
FINANCE & CORPORATE
Fourth Quarter Activities Report
HIGHLIGHTS
CORPORATE
PEAK HILL
DUBBO
EXPLORATION
HIGHLIGHTS
1. OIL PRICE, OIL SALES
The price of oil for the West Texas Intermediate (WTI) marker crude remained above US$30 for most of the quarter, up from a low of around US$25 in mid-April, 2000, and is currently (mid-July) above US$31. The US$/A$ exchange rate has remained favourable, at less than US$0.60 = A$1 for the quarter.
The sale of Joint Venture crude on a monthly basis to BP continued.
2. PRODUCTION
The company's total oil production for the quarter ending June, 2000 was 7980 barrels, up from 4,660 barrels in the previous quarter as a result of the workovers of four wells.
3. FIELD OPERATIONS
The planned workovers of Blina-4 and -5 and Lloyd-1 and -3 were completed in May, delayed for four to five months after one of the wettest and most prolonged Wet Seasons on record. All the wells responded to treatment, and monthly production went from 1,075 barrels in April, the last full month before the workovers, to 4,340 barrels in June, the first full month after the workovers.
4. CANNING BASIN ACREAGE POSITION
Negotiations are continuing with the native title applicants on the Pictor Block, 2/96-7. The block contains the promising oil and gas discovery of Pictor-1, and the Company is keen to gain formal title to the permit since it fits well with our adjacent permits EP390 and 391 and the lessons learned in one will help in the other two. The Pictor Block also shares common geology and prospectivity with the Shell acreage which surrounds it on the north, east, and south and any success in the current Shell push to farm out an interest in its permits will enhance the value of Kimberley's acreage.
5. CURRENTLY
As discussed in the previous quarterly report, work has continued on the prospects in EP391 and 371.
During the quarter, the Kjirt option on EP390 expired and the Company has renewed its own investigation of the prospectivity of this block. The Admiral Bay Fault Zone which cuts northwest-southeast across the middle of the block, and the area to the north and east, was extensively evaluated by CRA in the mid-1980's for Mississippi Valley-style lead-zinc mineralization in the Ordovician Nita and Goldwyer Formations. The evaluation took the form of a grid of seismic over the Fault Zone proper, and 24 fully cored mineral holes in and around the fault zone.
The CRA seismic is of fair quality and has been used to generate a more detailed map of the area than has been available before. The drilling records for all of the core holes have now been located. They have been used to guide further evaluation of this highly prospective area in which every well (11 oil exploration and 24 mineral holes) has returned promising shows of oil and/or wet gas in the Nita. Furthermore, some of the wells have indicated promise of very wet gas in the underlying Goldwyer.
The failure of any wells in the area to produce oil on test indicates that there is a reservoir problem in these carbonates which has not yet been successfully addressed. The Company intends to examine the available core to try to understand the environment of deposition of the Nita and the Goldwyer and so map the distribution of potential reservoir. If there is sufficient volume of reservoir rock to justify further investigation, then engineering studies will be conducted to try to determine an optimum approach to drilling and stimulating the section.
A brochure was prepared to assist the Company in its efforts to attract farmin interest in the various projects which are now being evaluated. The farmin market is still quiet in spite of the continuing strong price for oil but we have received expressions of interest from several local and overseas parties.
6. COALBED METHANE-POLAND
The Company continues to maintain a watching brief on energy developments in Central Europe in general, and on possible coal bed methane projects in Poland in particular.
Lakes Oil is continuing a post North Seaspray No. 3 interpretation with its consultants.
This has resulted in an interesting model being prepared which indicates the potential for "alluvial fans" below the Latrobe sequence in this area. We believe that one of these fans is located below the Seaspray structure and is "water wet". A second, as yet unnamed, fan occurs to the south. This fan appears to have the potential to be of considerable size, with sands indicated to be in excess of one hundred metres thick. Unlike the Seaspray fan, the second fan appears to be insulated from the water in the overlaying Latrobe Formation.
SANTOS LIMITED - SUMMARY OF DRILLING
WEEK ENDING 20/07/2000
QUEENSLAND
WELL: Stokes 7
TYPE: SWQ Unit Gas Development
LOCATION: PL 84, Total 66 Block, 1.3km NE of Stokes 6, 1.7km E of Stokes 4 and some 130km SW of the Ballera Gas Centre.
STATUS AT 20/07/2000 0600 HOURS: The well has been cased and suspended as a Permian gas producer. The well reached a total depth of 2609m, with no progress for the week. The rig was released on 14/7/00 and moved to Stokes 8, a PL 84 gas development well.
PLANNED TOTAL DEPTH: 2591m
WELL: Stokes 8
TYPE: SWQ Unit Gas Development
LOCATION: PL 84, Total 66 Block, 1.9km NNW of Stokes 1, 1.5km SSE of Stokes 3 and 130km SW of the Ballera Gas Centre.
STATUS AT 20/07/2000
0600 HOURS: Waiting on cement having set surface casing. Current
depth and progress for the week is 857m. The well
spudded on 18/7/00.
PLANNED TOTAL DEPTH: 2492m
OPERATOR: Santos Group
WELL: Challum 17 DW1
TYPE: SWQ Unit Gas Development
LOCATION: PL 59, Aquitaine B Block, 1.5km SE of Challum 16, 0.7km NNE of Challum 8, and 20km W of the Ballera Gas Centre.
STATUS AT 20/07/2000 0600 HOURS: Circulating hole clean prior to pulling out of hole to run surface casing. Current depth and progress for the week is 1009m. The well spudded on 16/7/00.
Challum 17DW is designed as a high angle well with two sub-horizontal lateral wellbores designed to drain separate reservoirs in the Permian age Toolachee Formation. Challum 17 DW1 is designated the lower lateral wellbore while Challum 17 DW2 is designated the upper lateral wellbore.
PLANNED TOTAL DEPTH: DW1 3029m MD
WELL: Wippo East 1
TYPE: SWQ Unit Gas Exploration
LOCATION: ATP 259, Naccowlah Block 3.1km ESE of Wippo 1, 6.6km NNE of Wippo South 2, and some 30km NE of the Ballera Gas Centre.
STATUS AT 20/07/2000 0600 HOURS: Drilling ahead at 2201m, with 1325m progress for the week.
PLANNED TOTAL DEPTH: 2637m
WELL: Merivale 10
TYPE: Gas Development
LOCATION: PL 44, Denison Trough, 690m SSE of Merivale 8,680m SW of Merivale 8, and some 140km N of the township of Roma.
STATUS AT 20/07/2000 0600 HOURS: Drilling ahead at 1174m, with 922m progress for the week.
PLANNED TOTAL DEPTH: 2300m
SANTOS LIMITED - SUMMARY OF DRILLING
WEEK ENDING 20/07/2000
OFFSHORE WESTERN AUSTRALIA
WELL: Stag 21H
TYPE: Oil Development
LOCATION: WA-15L Barrow Basin, NW Shelf, Offshore WA, 25km of Wandoo, 64km NW of Dampier
STATUS AT 20/07/2000 0600 HOURS: The well has been cased and completed as an oil producer. The well reached a total depth of 1188m, with 869m progress for the week. The rig was skidded to Stag 15H-L2 on 18/7/00.
PLANNED TOTAL DEPTH: 1196m
USA
WELL: Webb 1
TYPE: Gas Exploration
LOCATION: Suemaur Moore Prospect, San Patricio County, Texas
STATUS AT 19/07/2000 0600 HOURS: Webb 1 has been plugged and abandoned. The well reached a total depth of 3852m with 30m progress for the week.
PLANNED TOTAL DEPTH: 4115m
WELL: State Tract 157#1
TYPE: Gas Exploration
LOCATION: South Long Reef Prospect, Aransas County, Texas
STATUS AT 19/07/2000 0600 HOURS: The well reached a total depth of 3967m, with 218m progress for the week.
PLANNED TOTAL DEPTH: 3048m
SANTOS LIMITED - SUMMARY OF DRILLING
WEEK ENDING 20/07/2000
South Australia
WELL: Meranji 20
TYPE: Gas Development
LOCATION: PPL 35, Merrimelia-Innamincka Block, 0.5km ESE of Meranji 4, 0.6km NNE of Meranji 17, and some 30km NNW of the Moomba Gas Plant.
STATUS AT 20/07/2000 0600 HOURS: Drilling ahead. Current depth and progress for the week is 2099m. The well spudded on 13/07/2000.
PLANNED TOTAL DEPTH: 3010m
WELL: Moomba 114
TYPE: Gas Development
LOCATION: PPL 7, Moomba Block, 1.1km SE of Moomba 74, 1.0km NNE of Moomba 71, and some 9km NW of the Moomba Gas Plant.
STATUS AT 20/07/2000 0600 HOURS: Pulling out of hole to run wireline logs at total depth. The well reached a total depth of 2766m, with 1846m progress for the week.
PLANNED TOTAL DEPTH: 2759m
WELL: Moomba 118DW
TYPE: Oil Development
LOCATION: PPL 7, Moomba Block, 0.3km ENE of Moomba 104, 0.7km SSE of Moomba 24, and some 6km S of the Moomba Gas Plant.
STATUS AT 20/07/2000 0600 HOURS: Running in hole to drill ahead with steerable drilling assembly. Current measured depth and progress for the week is 1540m. The well spudded on 13/07/2000. Moomba 118 is a high angle oil development well designed to drain reserves from the Jurassic aged Hutton Sandstone oil pool, recently discovered by Moomba 104 oil exploration well.
PLANNED TOTAL DEPTH: 2414m
QUEENSLAND GAS COMPANY LIMITED PLANS $12 MILLION FLOAT
Queensland Gas Company (QGC) has launched a public float to raise $12 million to explore for appraise, develop and market coalbed methane (CBM) resources of the Walloon Coal Measures of the Surat Basin. The key prospects are in the Wandoan–Dalby–Miles area to the west of Brisbane.
The Walloon coal has certain similarities to the coal of the Powder River basin in Wyoming, which is rapidly emerging as a major producer of CBM in the USA. Production there has grown to 300 million cubic feet per day in a little over three years and this is expected to double again in another 3 years.
QGC is offering 60 million shares at 20 cents. The Public Offer is fully underwritten by Wilson HTM Corporate Services Ltd and D&D Tolhurst Ltd.
QGC has acquired a strong land position in the Surat Basin covering over 8000 sq km of the thickest sections of the Walloons, where gas blow outs have occurred during past drilling. The relatively low-rank coals in the Walloon Coal Measures in the eastern Surat Basin, in which QGC has rights to earn interests, have excellent potential for large-scale production of CBM. The target areas are covered by freehold title and are close to existing trunk gas pipelines to Brisbane. Overall, the Walloon coals have the potential to contain CBM approaching twice Queensland’s current natural gas reserves.
QGC’s Chairman, Mr Bob Bryan, said the key to successful development of CBM lies in the control of costs, and in this regard QGC’s association with Thiess is very important. As well as being an equity holder in QGC, Thiess will be QGC’s project manager for the development and operation of QGC’s gas fields. The experience of Thiess as a major contractor in the resources sector, and their well earned reputation for cost effective operations, will be a major benefit to QGC.
Mr Bryan said QGC has also signed a Memorandum of Understanding with CS Energy Limited a Queensland Government wholly owned electricity generating corporation. The Memorandum provides CS Energy with an exclusive right to assess QGC’s CBM prospects with a view to entering into a long term gas purchase agreement.
In this regard, it is relevant to note that CS Energy has committed to a new 385 megawatt gas fired generating facility at Swanbank near Ipswich; and the first tranche of gas to fuel the facility will come from the Scotia CBM field on the southern flank of the Bowen Basin, but close to QGC’s Surat Basin prospects. This MOU is very significant for QGC which hopes to become a major supplier of gas to the generating industry.
It is anticipated that QGC will commence drilling operations in the Surat Basin within eight weeks of the completion of the float. This would be a 10 hole turnkey drilling program, and the first stage of a strategy designed to have QGC producing commercial quantities of CBM in 2-3 years. It is envisaged that this $12 million raising from the public will be sufficient to bring to market this initial tranche of CBM production.
The Public Offer is made in a Prospectus lodged with ASIC on 19 July 2000. The offer will open on 31 July 2000 and is scheduled to close on 18 August 2000. A listing of the shares on ASX is expected on 28 August 2000.
Offers of QGC shares will be made in a copy of the Prospectus. Anyone wishing to acquire QGC shares will need to complete the application form that will be in the Prospectus.
Ashton Mining of Canada Inc (AMCI) reports microdiamond results for kimberlites K252, K8 and K160 which were discovered on the Buffalo Hills property in Alberta in February and March 2000.
| KIMBERLITE | LABORATORY | SAMPLE WEIGHT (kg) |
MICRO (0.1-0.5mm) |
DIAMONDS MACRO >0.5mm (ONE DIMENSION) |
| K252 | AMCI | 65.5 | 101 | 5 (see note 1) |
| K8 | AMCI | 142.2 | 3 | 0 |
| K8 | AML | 132.0 | 1 | 1 (see note 2) |
| K8 Total | 274.2 | 4 | 1 | |
| K160 | AMCI | 45.9 | 2 | 0 |
LABORATORIES:
AMCI - North Vancouver
AML - Ashton Mining Limited - Perth, Australia
K252 is located one kilometre northwest of K6 and six kilometres south of K14, and is covered by 77 metres of overburden. It is represented by a complex geophysical anomaly currently estimated to be approximately 150 metres in diameter. As reported on March 23, 2000, the kimberlite has two distinct phases; a fine to medium-grained volcaniclastic kimberlite, and a kimberlite breccia. The 65.5 kilogram sample reported above was collected from the breccia phase. A 45 kilogram sample from the medium-grained volcaniclastic phase is being processed with results expected in August.
The results from K252 are among the best obtained from the 35 kimberlites discovered thus far by the Alberta joint venture. Further drilling and sampling will be undertaken to assess the size and diamond potential of the pipe.
Coal & Allied's consolidated profit after tax was $73.6 million to 30 June 2000. This compares with a profit of $34.9 million after tax for the same period last year. The profit includes an abnormal item of $33 million relating to the settlement of a contractual dispute.
Coal shipments for the first six months were 6.5 million tonnes, up 1.4 million tonnes compared with the same period last year. The increased volumes and a weaker Australian currency combined to offset the effect of lower US dollar coal prices. Sales revenue increased by $36.5 million to $288.4 million.
Production for the six months was 6.4 million tonnes, up 1.2 million tonnes compared with the same period last year. The increased production reflects the acquisition of the Howick mine in the second half of 1999.
SUMMARY OF HALF-YEAR RESULTS
| 2000 | 1999 | |
| Net profit after tax and abnormal items (A$ m) | 73.6 | 34.9 |
| Operating cash flow (A$ m) | 55.0 | 60.4 |
| Sales revenue (A$ m) | 288.4 | 251.9 |
| Production (m tonnes) | 6.4 | 5.2 |
TECHNICAL REPORT FOR QUARTER ENDING 31st MARCH 2000
NEW SOUTH WALES
GILGUNNIA (EL5440)
The Company's field activities during the quarter were concentrated on the Mount McKellar gold prospect (within EL5440 approximately 100km southeasterly from Cobar), where further mapping and sampling (including BLEG stream sediment geochemistry) were carried out.
The prospect occurs near the faulted eastern margin of the prospective Cobar Basin. No workings are recorded in the prospect area, but exploration to-date has outlined a large zone of anomalous gold within structurally disturbed and iron oxide/altered sediments analogous to those hosting the Mount Solitary and Mount Solar gold resources at Mount Hope to the south.
Twenty two RC holes drilled several years ago within a 1.8km x 200m anomalous (20 +ppb Au) soil zone intersected various lines of gold enriched with low grade aureoles, but drilling was clearly too widely spaced to fully test the nature and extent of gold mineralisation.
Future work will involve continuous outcrop sampling, further steam sediment and soil geochemistry and drilling as warranted.
BOBADAH (EL4067)
JV operator Tri Origin Australia NL report that their proposed airborne EM survey over the prospective Bobadah gold-base metal belt in central western NSW is on hold pending aircraft availability.
No further work was undertaken during the quarter on the following Exploration Licences:
1466 (Mt Hope) 5343 (Mt Hope)
3714 (Mudgee) 4459 (Ottery)
4514 (Carcoar) 5492 (Rylstone)
Within EL's 3714 and 4459 deep drilling is required to further define the known mineralisation (respectively gold and gold/copper/ cobalt/rare earths).
Additional drilling has also been recommended at the Ottery Mine to further test both the known tin resource and the possibility of economic tin mineralisation associated with a buried intrusion several hundred metres to the west.
WESTERN AUSTRALIA
ROTHSAY (M59/39, M59/40, L59/24)
A joint venture has been signed with Thundelarra Exploration Ltd to further test the Rothsay gold resource 300km north of Perth.
Thundelarra will earn a 70% interest by spending $350,000 on exploration, after which Central West Gold can elect to contribute pro rata or dilute.
FLETCHER CHALLENGE ENERGY
DRILLING & PRODUCTION TESTING REPORT
For the week ending 19/07/2000
Country : New Zealand
Block Area or Prospect : PML 38036
Well Name or Location : McKee-2B/C
Objective : Sidetrack development infill well in the McKee oil reservoir.
Current Status : * Intersected top McKee within expected range.
* Successfully drilled though McKee interval to TD of 2316mAHKB.
* Ran open-hole logs. Logs indicated the McKee was water swept in this area with no oil column present.
* Well plugged back to 1570m and left standing.
* Rig out.
Country : New Zealand
Block Area or Prospect : PML381012
Well Name or Location : MB-7
Objective : Horizontal development well in the Maui B D1.10 oil reservoir.
Current Status : * Drilled 6" horizontal hole from 3499m to 3703m.
* Current operation @ 0600hrs 20th July, fishing stuck drilling pipe and BHA.
Country : New Zealand
Block Area or Prospect : PML381012
Well Name or Location : MB-6
Objective : Horizontal development well in the Maui B D1.10 oil reservoir.
Current Status : * Suspended well with stuck 4(1/2)" liner pending evaluation of side-track or completion options while operations proceed on MB-7.
Country : Brunei
Block Area or Prospect : Block CD
Well Name or Location : EEG-(1)
Objective : Stacked Pliocene Shelf Sand objectives 3400-4600m
Current Status : * Drilled to 4280m.
* Logged well.
* Confirmed objectives had been penetrated.
* No significant hydrocarbons.
* Commenced abandonment operations.
Fletcher Challenge Energy has completed the third well of its current Brunei exploration drilling campaign. It advised the New Zealand Stock Exchange that the East Egret-1 well was plugged and abandoned at a total depth of 4289 metres after failing to encounter significant quantities of hydrocarbons.
With its joint venture partners, Fletcher Challenge Energy decided that it was prudent to curtail the exploration programme to enable learning from the three well programme to be reviewed and integrated before proceeding with further exploration investment in Brunei.
SUMMARY OF ACTIVITIES
* 1999/00 profit expected to exceed the record profit of $21.5 million achieved in 1998/99
PRODUCTION
* Outstanding gold production with a record 177,252 ounces (544,679 ounces for the 1999/00 year).
* Cash costs of $288/oz for the quarter ($276/oz for the year).
* Total costs of $414/oz for the quarter ($410/oz for the year).
* Operationally, all sites performed extremely well. Porgera delivered another quarterly production of over 200,000 ounces. Kundana achieved record quarterly and record annual production, with lower operating costs. Paddington operated at full capacity over the quarter on Paddington ore. Record mill throughput, equivalent to over 196,000 tonnes annually, was achieved at Henty.
EXPLORATION
* Aphrodite Inferred Resource increased by 399,000 contained ounces to a total Inferred Resource of 893,000 contained ounces.
* Probable Reserves of 213,000 tonnes at 16.1g/t Au for 111,000 contained ounces discovered at Raleigh on the Kundana Mine Lease. The Inferred plus Indicated Resource of 300,000 tonnes at 18.2g/t Au for 176,000 ounces remains open at depth and to the south.
* Discovery of the Raleigh southern extension onto the East Kundana JV tenement.
* An Indicated and Inferred Resource of 390,000 tonnes at 2.4g/t Au for 30,000 contained ounces at the Wadi prospect, west of Kundana.
* Paradigm resource upgraded to Indicated status with 161,000 tonnes at 13g/t Au for 67,000 ounces within the original 84,000 ounces Inferred Resource.
* Highly encouraging results from underground drilling of the Mount Julia resource at Henty.
FINANCE
* Gold price of $512/oz received for the quarter and $534/oz for the year.
* Goldfields' Revolving Credit Facility was increased by US$15 million to US$136 million during the quarter.
* The mark to market valuation of gold and currency hedging was negative $1.5 million and negative $41.8 million respectively (at 30th June 2000 using US$288/oz and an exchange rate of US$0.6005).
CORPORATE
* Through it subsidiary Goldfields Kalgoorlie Limited, Goldfields assumed full control of Gilt-Edged Mining NL on 20th June 2000.
* Goldfields submitted the winning tender for Mineral Commodities NL's share of the Mungari West Joint Venture. The offer is subject to a 30 day pre-emptive right period by Mines & Resources Australia Pty Ltd from 29th June 2000.
* On 28th June 2000, the shareholders of Goldfields Kalgoorlie Limited (GKL) approved a selective capital reduction of the minority shareholdings in GKL.
HIGHLIGHTS
* GME and Western Metals Ltd progress the agreements to finalise the formation of the NiWest Nickel Project.
* GME and Delta Gold Ltd enter Joint Venture on the Abednego West Project.
EXPLORATION REVIEW
LEONORA-LAVERTON NICKEL-COBALT PROJECTS
GME PROPERTIES
Last quarter Western Metals Limited and GME announced they had agreed to merge their lateritic nickel tenements in the Leonora area of Western Australia to create a new lateritic nickel project.
A new company, NiWest, 60% owned by Western Metals and 40% owned by GME will be formed as part of the agreement. The new company will control tenements with a combined resource in excess of 100 million tonnes of laterite nickel grading 1.02% nickel and 0.07% cobalt.
NiWests main objective will be to develop a stand-alone project utilising these resources and it will immediately commence a scoping study to determine the best development options.
NiWest will be initially funded by its shareholders however future funding to achieve bankable feasibility stage is most likely to come from a combination of new equity investors, industry participants and base metal consumers.
GME Resources will be closely involved with the project, however this agreement will allow it to also consider other opportunities.
The total nickel resources involved are tabulated below on the basis of a 0.7% Ni lower cut-off grade.
Second Quarter Activities Report
FOR THE PERIOD ENDED 30 JUNE 2000
MINING AND PRODUCTION
Gold production was 60,051 ounces for the June quarter and 120,609 for the first six months of 2000. This compares with 53,038 ounces and 110,586 ounces for the respective 1999 periods. Operating costs for the quarter (excluding exploration) totalled $28.7 million.
Although production increased substantially, it was below plan. This was due to continued difficult mining conditions resulting from pit instability, restricted operating room, poor equipment availability and rain delays. Gold production was also impacted by lower than expected head grade from Eldridge ore.
Studies to explain the grade variability of Eldridge ore are currently underway.
Total tonnes mined were 4.3 million tonnes in the quarter and 8.9 million tonnes in the first half of 2000, a significant decrease compared with 6.5 and 13.4 million tonnes mined in the same periods of 1999. This decrease reflects the reduced stripping requirements in the Eldridge pit and the difficult mining conditions. Consequently, approximately 28% of ore provided to the mill was reclaimed from Kidston's low grade stockpiles. The combination of Eldridge ore at lower than expected head grade, and low grade stockpiles, resulted in an average head grade of 1.24 grams/tonne for the first half which was higher than the June 1999 half (1.14 g/t).
Kidston's mill continued to outperform with 1.8 million tonnes processed in the quarter and 3.7 million tonnes in the first half of 2000. Gold recovery was 82% and 81% respectively.
EXPLORATION
Exploration continued to focus on the Wandoo, Forsayth West and Percyville regions during the June quarter of 2000.
At the Wandoo prospect percussion and diamond drilling in May and June revealed inconsistent mineralisation and the project is currently under review.
Testing at the Forsayth West Joint Venture concentrated on the Pinnacles, Buchanans and Carlisle targets. At the Buchanans prospect, a 78 hole RAB program to test high intensity anomalies was designed, with drilling and sampling to take place mid-July. At Carlisle, a 28 hole RAB program was also planned, and drilling and sampling will be conducted in conjunction with the Buchanans program.
Sampling and mapping of the Percyville prospect (a joint venture with Newcrest Mining), identified a 700 to 900 metre long and 250 metre wide >50ppb gold soil anomalies at the Union and Patrick East vein systems, and Boomerang areas. An IP program, with follow up dipole-dipole traverses, was conducted during June. Costeaning of strong anomalies at the Union vein system began in June.
Exploration expenditure for the quarter amounted to $237,000.
PLACER DOME INC OWNERSHIP
Placer Dome Asia Pacific's 70% interest in Kidston is currently being transferred to Placer Dome Inc, which is the ultimate parent entity, The transfer follows Placer Dome Inc's successful takeover of Placer Pacific Limited (subsequently renamed Placer Dome Asia Pacific Limited) in 1997 and the simplification of ownership arrangements for subsidiary companies. This will have no consequences for other shareholders.
Kagara Zinc Ltd reports the following drilling results from its Mt Garnet zinc deposit in Northern Queensland.
Since the last ASX update of the 13 June 2000, assay results for an additional 18 infill reverse circulation holes and 2 diamond drill holes have been received.
Assay results are provided in the attached table, and continue to confirm the robust nature of the Mt Garnet mineralisation.
The best intersections include the following:
* GTR 42 - 20 metres at 7.0% zinc
* GTR 43 - 10 metres at 16.9% zinc
* GTR 48 - 34 metres at 10.1% zinc
* GTR 51 - 54 metres at 7.5% zinc
* GTR 57 - 19 metres at 12.6% zinc
* GTD 78 - 38 metres at 5.9% zinc
The drilling programme is now complete and assay results for the remaining holes are awaited. Once received they will enable a revised resource to be calculated during August, allowing finalisation of an optimised open pit and underground mine design.
TECHNICAL REPORT FOR QUARTER ENDING 30th JUNE, 2000
NEW SOUTH WALES
GILGUNNIA (EL 5440)
The Company's field activities during the quarter were concentrated on the Mount McKellar gold prospect (within EL 5440 approximately 100km southeasterly from Cobar), where further mapping and sampling (including BLEG stream sediment geochemistry) were carried out.
The prospect occurs near the faulted eastern margin of the prospective Cobar Basin. No workings are recorded in the prospect area, but exploration to-date has outlined a large zone of anomalous gold within structurally disturbed and iron oxide/altered sediments analogous to those hosting the Mount Solitary and Mount Solar gold resources at Mount Hope to the south.
Twenty two RC holes drilled several years ago within a 1.8km x 200m anomalous (20 +ppb Au) soil zone intersected various lines of gold enriched with low grade aureoles, but drilling was clearly too widely spaced to fully test the nature and extent of gold mineralisation.
Future work will involve continuous outcrop sampling, further steam sediment and soil geochemistry and drilling as warranted.
BOBADAH (EL 4067)
JV operator Tri Origin Australia NL report that their proposed airborne EM survey over the prospective Bobadah gold-base metal belt in central western NSW is on hold pending aircraft availability.
No further work was undertaken during the quarter on the following Exploration Licences:
3714 (Mudgee) 4459 (Ottery)
4514 (Carcoar) 5492 (Rylstone)
1466 (Mt Hope) 5343 (Mt Hope)
Within EL's 3714 and 4459 deep drilling is required to further define the known mineralisation (respectively gold and gold/copper/cobalt/rare earths).
Additional drilling has also been recommended at the Ottery Mine to further test both the known tin resource and the possibility of economic tin mineralisation associated with a buried intrusion several hundred metres to the west.
VICTORIA
No further work was carried out at the Morning Star gold project during the quarter.
Moderate sized open cuttable resources have been outlined at Morning Star and there is good potential to increase both these resources and those at depth associated with the known gold-bearing quartz reef systems.
The company would be interested in fielding any JV approaches from interested parties.
Merivale No 10, a gas appraisal well situated approximately 690 metres south-south-east of Merivale No 8, latitude 25deg 33min 38.85sec south, longitude 148deg 20min 13.68sec east, was spudded at 23:30 hours on July 10, 2000. Surface casing was set at 250.1 metres RT at 06:00 hours 20 July, the rig was drilling ahead in the intermediate section at 1174 metres. Progress for the week was 922 metres.
The primary targets of the well are the Aldebaran, Staircase and Reids Dome Sandstones.
QUARTERLY REPORT FOR THE PERIOD ENDING 30TH JUNE 2000
HIGHLIGHTS
* Estimated gold resources at Chirano increased to 19.1MT grading 2.2g/t for 1.38Moz
* Stage 1 of the Prefeasibility Study completed ahead of schedule with preliminary pit optimisation studies resulting in the capture of 7.6MT grading 2.6g/t for 581,000 recovered ounces
* Stage 2 of the Prefeasibility Study to be completed within the next 3 months aimed at converting the remainder of resources to reserves for a plant of up to 1.5MTPA
* Initial pit optimisation studies indicate six open pits with average stripping ratio of 2.9:1
* The studies are based on a 1MTPA plant with recoveries of 91.9% producing 76,000 ounces/annum over a 7.6 year mine life
* The use of neighbouring processing plants are being considered as alternatives to a standalone development option
HIGHLIGHTS
* Quarterly gold production of 117,271 fine ounces with record quarterly production from the Marvel Loch and Sons of Gwalia Mines.
* Gold production of 413,184 fine ounces for the financial year ended 30 June 2000.
* Record tantalum production for the quarter of 338,950 lbs.
* Extended tantalum sales contracts entered into for a minimum five year period significantly increasing sales and volumes.
* Tantalum production to be more than doubled resulting from $100 million major expansions of the Greenbushes and Wodgina Mines.
* Further significant and encouraging drilling results from the Gwalia Deeps and Red October exploration programmes with resources of 1.2 million ounces delineated to date at Gwalia Deeps.
Second Quarter Activities Report
NORTH WEST SHELF
* Domestic Gas: Production to plan despite reduced demand from BHP DRI plant.
* LNG: Two additional spot cargoes were loaded and delivered to CMS this quarter.
* Condensate: Steady production above plan assisted by extra liquids from Goodwyn "A" production platform.
* Oil: Steady production at a total average daily rate of more than 116,000 bbls/day (Woodside's share 19,383 bbls/day)
* LPG: Steady production.
LAMINARIA AND CORALLINA
* The Laminaria/Corallina reservoir continues to perform to expectation. Sustainable production levels of 180,000 bbls/day have been achieved during the quarter. Average daily production from the fields was 152,700 bbls/day (Woodside's share 71,632 bbls/day).
* Total production from the Northern Endeavour for the first half of 2000 was 25.76 MMbbl (Woodside's share 12.03 MMbbl)
LEGENDRE OIL FIELD DEVELOPMENT
* The project is 28.2% complete against a planned figure of 28.1%. Projected start-up of production from the Legendre field remains Quarter 2, 2001.
* Costs remain within the budget forecast of $110 million.
1. DRILLING OPERATIONS
1.1 SALTFLEETBY-5 (ROC: 100%)
As of 6 pm on 18 July (UK time) the operation at Saltfleetby-5 was cementing 13-(3/8)" casing at 635 metres. The 3,200 metre well, including, if warranted, a planned 300 metre horizontal section, is designed to test the gas potential of the Namurian which underlies the field's main Westphalian reservoir.
1.2 THE KYLE OIL FIELD (ROC: 12.5%)
Operations have commenced at the Kyle Northeastern appraisal well location, where a well is being drilled to evaluate the reserve potential in this part of the Kyle structure. A shallow pilot hole spudded on 16 July and was drilled to 594 metres, confirming the absence of gas pockets in the sediments immediately below the sea bed. As of noon on 18 July (UK time) the operation was drilling 36" surface hole.
2. PRODUCTION TESTING
2.1 KEDDINGTON-2
During the week Keddington-2 was brought onto free-flow production at an initial rate of 274 BOPD without any water production. This compares to an initial first flush production flow from Keddington-1 in the order of 50 to 60 BOPD. During the first week of free-flowing production Keddington-2 production rates declined, in line with expectation, to just over 100 BOPD with an average for the period of approximately 170 BOPD. Keddington-2, which is approximately 5 metres high to Keddington-1, will be placed on pump prior to the end of the month in accordance with the pro-drill schedule.
2.2 KYLE EXTENDED WELL TEST (EWT)
This EWT continues to produce at a rate of 13,000 B0PD with no water. As the pressure near the well drops below bubble point pressure as predicted, the gas-oil ratio has started to increase slowly and this trend will be controlled to maintain it within the guidelines for the conduct of the EWT.
KEY SUMMARY- Second Quarter Activities Report
CORPORATE
* 7.9 million shares taken up (43%) in one for five rights issue
raises $1.1 million
* Discussions to place shortfall initiated
PEAK HILL
* Record gold production of 7,626 ounces for quarter
* Cash costs of A$352 per ounce with revenue of A$448 per ounce
* Mining commenced on Great Eastern ore body
DUBBO
* Zirconia product of 99.2% ZrO(2) (+HfO(2)) produced
* Zirconia product distributed to potential consumers in Japan and Europe
* Update of feasibility study being compiled
* Major RC drilling programme commences in July
EXPLORATION
* Anglogold drilling at Molong
* Interval of 51 metres grading 0.97% nickel reported by Anaconda Nickel at Tottenham
* Jubilee Mines commence work on Leinster Region Joint Venture
THE MORWELL PROJECT
The Directors of EnviroStar Energy Limited announce that the company will develop a 20MW renewable green waste to energy power project at Morwell in Victoria.
Development Approval has been received from the La Trobe Shire Council for the $30,000,000 project. It is anticipated that construction of the Morwell Project will commence at the end of year 2000.
The Morwell Project will be the second renewable green waste to energy power project to be developed by EnviroStar Energy Limited in Australia.
THE STAPYLTON PROJECT
The Directors of EnviroStar Energy Limited announce that site works for the renewable green waste to energy power project at Stapylton on Queensland's Gold Coast will commence next week, that is, the week beginning 24th July, 2000.
HIGHLIGHTS
CLEAR BRANCH FIELD, JACKSON PARISH, NORTH LOUISIANA
The second well in the year 2000 program, The Terry Ewing No 1 well, is presently drilling ahead at 9,533 feet after running surface casing to 3,025 feet. The well is a 12,200-foot test of the Clear Branch Field Gas Prospect.
The location lies on trend with significant Hosston and Cotton Valley production which blankets a portion of North Louisiana. Hunt Oil discovered the field in 1976 and has produced in excess of 55 billion cubic feet of gas from multiple Hosston reservoirs.
Importantly, all of the gas completions within the field were natural and no infill drilling or stimulation has been applied at Clear Branch. Engineering studies suggest significant amounts of producible gas could remain within the Hosston reservoirs and be captured by wells drilled on smaller spacing.
In addition the deeper Cotton Valley gives the prospect considerable upside with overall potential being in the 50 plus billion cubic foot range. The test well is designed to evaluate both objectives.
Up to five wells may be required to recover the field potential. Modern fracturing technology supports a case for flow rates exceeding 5 million cubic feet of gas per day. A pipeline lies adjacent to the test well location and spot gas is currently trading above US$4.00 per thousand cubic feet.
FAR has a 12.5 percent participation in the Clear Branch project reducing to a 9.375% working interest on completion of the test well. Other interests are held by North American companies including the operator, Rio Bravo Exploration & Production Company.
MIKESKA-HAMILL FIELD PROSPECT, AUSTIN COUNTY, TEXAS
The third well in the year 2000 program, the Schulz-1 well, spudded on 9 July 2000 and is presently drilling ahead at 6,495 feet using Paterson Rig 127. The well is an 8,650-foot test of the Mikeska-Hamill Field Oil Prospect.
The Mikeska-Hamill Field is located in Northwestern Austin County. The most significant production in this field is from the Blum No 1 well which was drilled in 1986 and has produced 280,000 barrels of oil from the 8,600 foot Wilcox oil sand. Engineering studies suggest this well is part of a much larger reservoir.
The Schulz-1 test well will be drilled to evaluate the remaining oil in the Wilcox Oil Sand Reservoir at 8,630 feet. The prospect is a three way dip structure bounded by a fault to the Southeast and is supported by sub surface well control.
The National Executive Council has endorsed the 'Project Document', which includes the Mining Development Contract, the Special Mining Lease and the Memorandum of Agreement, for the Ramu Nickel/Cobalt project in the Madang Province.
Announcing the decision, Prime Minister Sir Mekere Morauta said Cabinet's approval paved the way for the developers, Ramu Nickel Ltd and Orogen Minerals, to finalise all necessary project requirements.
Sir Mekere said Ramu would be the first resources project to receive a guarantee of stability under the Government's new fiscal stability policy announced in Parliament recently.
A subsidiary of Swiftel Limited has signed an agreement with Helix Resources NL to acquire 100% of the Panton Platinum-Palladium Project for 13.5% of the shares and 6.75% of the options to be issued in the proposed initial public offering of Platinum Australia Limited, subject to a minimum of $3.5 million being raised in the initial public offering. This agreement supersedes the Panton farmin deal announced to the Australian Stock Exchange Limited on 21 March, 2000.
The Panton Project, located in the Kimberley Region of Western Australia, is Australia's only high grade Platinum Group Elements deposit with established resources. Diamond drilling and reverse circulation drilling by previous leaseholders between 1972 and 1989 has defined an indicated and inferred resource of 2 million tonnes at 6.02 grams per tonne PGE, plus gold (gold averages about 0.5 grams per tonne) and 0.28% nickel. This resource is based on a single chromitite layer or reef, the "A" chromitite, and uses a 3 grams per tonne PGE + gold cut-off and a minimum width of 1.2 metres. The chromitite itself averages about 0.8 metres thick, so the resource includes unmineralised wall rock.
REPORT ON ACTIVITIES FOR THE THREE MONTHS ENDED 30 JUNE 2000
PRODUCTION Three months - 544,533 ounces
(attributable) Twelve months - record 1.97 million ounces
EXPLORATION Further high grade drill intersections at Jundee, Pajingo, Callie and Golden Grove
CORPORATE Magnesium restructure approved, industrial Minerals sale nears completion
Australian Dollar Values are used in this report other than where specified. For convenience, some key financial figures have been translated at A$1.00 = US$0.5990
Fourth Quarter Activities Report Overview
GOLD
* ATTRIBUTABLE PRODUCTION
- 544,533 ounces (419,477oz)
- Total cash cost, $297 per ounce ($313/oz)
- Attributable gold sales, 553,562 ounces (420,083oz) at an
average realised $562 per ounce ($567/oz)
- Margin, $265 per ounce ($254/oz)
- High fuel prices adds to costs
- Record production from Tanami, Pajingo and Martha
* DEVELOPMENT
- Callie, 1.5Mtpa ore production and 2.5Mtpa mill rates achieved
- Ity (Cote d'lvoire), plant relocated, expanded and commissioned
- Kalgoorlie, flotation circuit upgrade commissioning commences
- Yandal, Wiluna open pit project approved
- Boddington Expansion, 10.9Moz reserve estimated
- Groundrush, pre-feasibility drilling completed
- Perama (Greece), permitting process continues
- Yamfo-Sefwi (Ghana), feasibility on schedule, contiguous Ntotoroso
Area E feasibility commenced
* EXPLORATION
- Heavy rainfall continued to impede northern Australia exploration
- Yandal, Jundee high grade intersections
- Pajingo, new intersections at Jandam and Zed
- Callie, resource potential outside typical host unit
- Ity, drilling extends known mineralisation
- Kenbert (Ghana), resource estimation and scoping in progress
- Tasiast (Mauritania), resource estimation and scoping in progress
NON-GOLD
* ZINC (Golden Grove)
- Zinc concentrate production 58,649 tonnes (51,016t)
- Realised price 83.6c/lb, US50.1, cents per pound (US47.2c/lb)
- Amity, Catalpa and Scuddles Deeps North, further high grade
intercepts
* COBALT (Kasese)
- Production and cathode quality improve
RESTRUCTURING FOR GROWTH IN GOLD
* MAGNESIUM
- Magnesium ownership restructure approved
* INDUSTRIAL MINERALS
- Commercial Minerals and Omya Southern sold and consideration
received, Larvik Pigment sale negotiations advanced
FINANCE
* Profit for the twelve months to 30 June 2000 will be released 30 August 2OOO.
- Hedging restructure increases gold price participation to
44 percent in 2001
* No new or replacement hedging commitments
Previous quarter figures in brackets and italics
Bligh Oil and Minerals NL advises that it has reached agreement with Fletcher Challenge Energy Limited and Origin Energy Resources NZ Limited, whereby these two parties will farm in to PEP 38728, Taranaki Basin New Zealand. Bligh's interest in PEP 38728 is controlled by Marabella Enterprises Limited, a wholly-owned subsidiary of Bligh.
Under the terms of the farmout agreement, FCE and Origin will jointly fund 100% of the cost of an agreed seismic program on the Permit. No decision will be made as to the drilling of wells on the Permit, or the level to which Marabella will contribute to the cost of drilling any such wells, until after the new data have been reviewed, and interpreted into the existing seismic data base across the Permit.
Second Quarter Activities Report Summary
MT MURO - KALIMANTAN
TOKA TINDUNG DEVELOPMENT PROJECT - NORTH SULAWESI
MOROBE GOLD PROJECT - PAPUA NEW GUINEA
The Directors announce that following the successful fracture stimulation (fraccing) of the four wells (Rodney Creek #4, #5, #6 and the Rodney Creek #7) installation of the pumps is proceeding.
Rodney Creek #7 is ready for installation of the drive head and it is expected that all wells will be equipped with rods and pumps by 19 July 2000.
As reported previously the drilling phase of the trial development work has been a complete success. All holes were drilled without any technical problems and logging has shown that the coals were of the expected thickness and intersected at the predicted depths. All wells have now been fracced with sand usage indicating a good penetration. The final phase of program is about to commence with the de-watering and pump testing of the well.
The construction of a $20 million domestic LNG supply station on the Burrup Peninsula has the potential to substantially reduce power costs and speed up development in the whole North West Region of Western Australia.
The station, which is planned to be built as part of the Woodside-Energy Equity joint venture to supply the West Kimberley region, will use only one fifth of its capacity of 25 TJ/day.
A major new high-grade gold deposit located 2.5km south of Kundana Gold Mine has been discovered. Drilling during the June quarter has delineated mineralisation at the Raleigh deposit 240 metres in length and 120 metres in depth with numerous high grade intercepts in reverse circulation drilling. The deposit remains open to the south and at depth. A potential strike length of 2.5km exists to the southern boundary.
The latest drill program stepped out for 240 metres south of the JV boundary on lines 40 metres apart with high-grade vein intercepts obtained in each hole. On the southern most drill section (18,320N) two reverse circulation holes reported 6 metres at 15.3g/t gold and 2 meters at 25.2g/t gold (see Table 1).
Geologically, the Raleigh deposit lies on the southern continuation of the Strzelecki Main Vein. The Strzelecki deposit itself, which is 100% owned by Goldfields Ltd from which 365,000 ounces of gold has been produced up to 30 June, 2000, has remaining resources of 283,000 ounces and is still open below 644 metres.
Fourth Quarter Activities Report
After the wash-out experienced in the previous quarter, the operations performed within the Board's expectations for the June quarter.
The underground mines were strong contributors during the quarter with the Hill 50 mine continuing to increase in grade within the virgin northern lodes. The average grade for the quarter from Hill 50 was over 5.0 g/t Au and more importantly the increasing trend in each month of the quarter saw the grades in June average 6.0 g/t Au. Hill 50 has been developed to the 11 level (approx. 790m vertical) and will over the next year reach the virgin main lodes at the 12 level.
The Star mine continued its intensive level development campaign to set the mine up for stoping the smaller blocks, following the decision in the previous quarter to abandon bulk long-hole open stoping. It would appear from simple analysis that Star is producing at an annual rate of 500,000tpa. However, it should be noted that over 30% of the Star production came from development during the quarter, which is a disproportionate amount to what would be typical in the normal cycle. This is a function of setting the smaller stopes (post bulk stoping abandonment) to contribute a regular and increased ore flow. The Morning Star cluster now has nearly three complete levels developed in advance of stoping.
Open pit mining was completed in the Milky Way pit. This pit underperformed from the beginning and its completion was welcome. The open pit production at Titan continued but was slowed down to be commensurate with the requirement of this ore for mill blending. The remaining strip ratio is under 0.5:1 and in the month of June, mining for one shift gave the ore requirement for the whole month.
As well as Titan, the bulk of open pit production is now coming from Black Cat South and the recently started Reno Pit. These will provide the open pit feed into the blended ore stream for the next year.
The expanded Checkers plant began to perform strongly during the quarter with throughput averaging over 330tph and record tonnage and bullion production targets being broken during the quarter. Processing costs averaging $8.53 per tonne (quarter) reflected the performance, despite continued high power costs (fuel price).
Exploration activity was subdued as resource drilling took centre stage. However, a new discovery was made at Quasar NW, Jinx was drilled out to a stage where an open-pit mine looks likely, and O'Meara continued to show promise. Work around the old Perseverance open pit revealed a likely pit extension and Reno and Black Cat south continued to yield encouraging results for underground development.
Production Licence 16, Surat Basin Q1d - Mosaic Oil 100%.
East Glen No 1 has been placed on a 7 day production test with the view of assessing reserves to establish a further gas contract for Mosaic Oil NL. The well is currently flowing at 2 million cubic ft/day with condensate and LPG to Mosaic's account of approximately 30 barrels condensate per day and 1.3 tonnes LPG per day.
OPEN BRIEFING - CEO ON OUTLOOK
Forecasts are to produce, at a cash cost of A$350 per ounce, approximately 210,000 to 230,000 ounces at Big Bell and 100,000 to 120,000 ounces at Jubilee - making it 350,000 ounces at $350/oz for the company.
The mine life at Big Bell has been independently assessed by Australian Mining Consultants and upgraded to 5 years at those production levels, with expectations to explore beyond 5 years.
At Jubilee the present reserves indicate a mine life of 2 to 3 years. But that will also be extended by the exploration success at the Noble deposit, south-east of Coolgardie. Sufficient ore in the general area should enable the Company to continue for a minimum of 5 years.
WMC Acquires Option Over Major Mineral Sands Resource
WMC has acquired an exclusive option from the Johannesburg listed company Southern Mining Corporation Limited to carry out a due diligence investigation of the Corridor Sands Titanium Feedstock Project located in southern Mozambique. The due diligence is expected to be completed by the end of October 2000, when WMC will decide whether to exercise a further exclusive option to earn a majority interest in the Project and secure management control. WMC has also been granted an option to acquire 20% of the fully diluted issued capital of SMC, 10% as the issue of new shares and 10% from existing major shareholders, over the next two and a half years. Elements of the transaction are conditional on the approval of Southern Mining’s shareholders, of which, 83% have already undertaken to vote in favour.
Directors report on the operating performance of Austral Coal Limited for the June 2000 quarter.
SIGNIFICANT EVENTS
Australian Worldwide Exploration Limited announces its second-half 2000 exploration drilling campaign is set to commence later this month with drilling operations in Exploration Permit No 363 ("EP363"), in the Carnarvon Basin, Western Australia.
The Lotte-1 well is due to spud in late July in EP363 (see attached map) where AWE holds a 16% interest. The Operator of the drilling activities, Apache Energy, has prognosed drilling to 2,400 metres over approximately 10 days to test Cretaceous, Jurassic and Triassic aged objectives.
The prospect is a tilted fault block similar in style to other successful fields in the basin, and has been mapped on good quality 1999 vintage 3D seismic data.
Bligh Oil and Minerals NL advises that it has reached agreement with Fletcher Challenge Energy and Origin Energy, whereby these two parties will farm in to PEP 38728, Taranaki Basin New Zealand. Bligh's interest in PEP 38728 is controlled by Marabella Enterprises Limited, a wholly-owned subsidiary of Bligh.
Under the terms of the farmout agreement, FCE and Origin will jointly fund 100% of the cost of an agreed seismic program on the Permit. No decision will be made as to the drilling of wells on the Permit, or the level to which Marabella will contribute to the cost of drilling any such wells, until after the new data have been reviewed, and interpreted into the existing seismic data base across the Permit.
As a further step in its exploration portfolio restructuring, Fletcher Challenge Energy has increased its exploration acreage in New Zealand by acquiring a 30 per cent interest in exploration license area PEP 38728 in onshore Taranaki, New Zealand. The interest, acquired from Marabella Enterprises Ltd (a wholly owned subsidiary of Bligh Oil & Minerals NL), will be earned through the acquisition of seismic data.
In a related deal Fletcher Challenge Energy and Marabella have agreed in principle for Marabella to acquire a 10 per cent interest in PEP 38718 from Fletcher Challenge Energy.
Grenfell Resources and its exploration partner in Rajasthan, Meridian Peak Resources Corp, announce that they have executed a Heads of Agreement with BHP Minerals Pty Ltd whereby BHP may earn a 70% interest in the Bharatpur (Khankera) and Alwar prospecting licences in Rajasthan, India.
BHP will undertake a review of exploration data acquired by Grenfell and will drill test targets at its discretion within 12 months. The principal target areas are prospects previously delineated from aeromagnetic surveying, structural mapping and geochemical sampling.
SHARE PLACEMENT
At the general meeting of members held on 30 June 2000, inter alia, shareholders approved the issue of an additional 28.85 million shares and attaching options to fund its investments/activities. Application has since been made to the ASX to quote the shares concerned which are expected to list during the course of the week. An additional AUD2.3 million will have been raised through this issue.
Goldfields Kalgoorlie Limited has announced the discovery of a major new high-grade gold deposit located 2.5km south of its Kundana gold operation (see Figure 1). Drilling during the June quarter has extended mineralisation at the Raleigh deposit (previously reported as the Romeo prospect) to nearly 600 metres in length and 400 metres in depth with numerous high-grade intercepts in reverse circulation and diamond drilling. The deposit remains open to the south and at depth.
RESOURCE STATEMENT
RALEIGH PROSPECT, KALGOORLIE, WESTERN AUSTRALIA
An Indicated Mineral Resource of 224,000 tonnes at 20.0g/t gold and an Inferred Mineral Resource of approximately 76,000 tonnes at 13.1g/t gold is estimated for the Raleigh prospect. Raleigh is located on a granted Mining Lease M16/157 about 22 km northwest of Kalgoorlie, and 2.5km southeast of Goldfields Kalgoorlie's Kundana Mine.
The prospect is located in volcano-sedimentary rocks which form part of the Eastern Goldfields Province of the Archaean aged Yilgarn Block in Western Australia. The primary mineralisation is hosted by a structurally controlled, laminated quartz vein that dips steeply towards the west-southwest. The vein has been modelled to 300m vertical depth and over a length of 350m. The true thickness varies from 0.01m to 0.61m, with an average of 3lcm.
Commercial production has been declared for the Enterprise copper mine at Mount Isa from 1 July 2000.
Located beneath existing workings, Enterprise is the new copper ore source for MIM's Mount Isa operation.
Commercial production signifies that consistent operating performance is now being achieved, and brings to an end the capitalisation of the development costs of the Enterprise integrated ore handling system, including internal shaft, conveyor and mine development.
HIGHLIGHTS
PRODUCTION
Production of silica for the quarter is as follows:-
| JUNE QUARTER 30.6.00 |
MARCH QUARTER 31.3.00 |
|||
| PRODUCTION | PRODUCTION | PRODUCTION | PRODUCTION | |
| (tonnes) | EXPENDITURE | (tonnes) | EXPENDITURE | |
| Silica | 42,593 | $117,130 | 34,004 | $93,511 |
DEVELOPMENT AND EXPLORATION EXPENDITURE
During the quarter ending 30th June 2000 there was no expenditure incurred on development and exploration.
QUARTERLY REPORT FOR THE PERIOD ENDED 30 JUNE 2000 HIGHLIGHTS TO 18 JULY 2000
CORPORATE
KOOLYANOBBING IRON ORE PROJECT
COCKATOO ISLAND IRON ORE PROJECT
LITHGOW SILICON METAL PROJECT
JUNE QUARTERLY REPORT
31 MARCH TO 30 JUNE 2000
QUARTER HIGHLIGHTS
Woodside Petroleum Ltd, Operator of the WA-269-P Joint Venture, reports that the Titania-1 exploration well located in the Carnarvon Basin reached a total depth of 3196 metres on 12 July 2000. Wireline logs were run and the well was plugged and abandoned. The Marine 500 drilling rig was released from the Titania location at 2155 hours on 17 July.
All reported depths (except water depth) are referenced to the rig rotary table.
Australian Worldwide Exploration Limited, on behalf of its wholly-owned subsidiary Peedamullah Petroleum Pty Ltd, advises the leveraged farmout of a 5% interest in Exploration Permit No 364 has been agreed with the Norwest Energy NL group.
Norwest will fund an estimated A$210,000 of AWE's "dry hole" drilling costs of the Lindsay-1 exploration well in EP 364 to earn a 5% interest in the permit from AWE. The agreement is subject to the normal regulatory approvals.
QUARTER HIGHLIGHTS FOR SOUTH PACIFIC PETROLEUM AND CENTRAL PACIFIC MINERALS
Gold production for the June quarter was 212,135 ounces, compared with 205,328 ounces in the March quarter and 180,897 ounces in the corresponding June quarter of 1999.
Gold production for the six months ended 30 June, 2000 was 417,463 ounces compared with 296,198 ounces in the corresponding period in 1999.
This result was better than planned due to higher than expected ore grades from the Stage 3 pit particularly around previously mined underground stope areas. Gold production for the whole year has consequently been revised upward by 50,000 ounces and is now expected to be nearly 800,000 ounces.
Jubilee announces that JCD117, a diamond core hole drilled into the Cosmos Deeps deposit, has returned the best intercept to date from this exciting new discovery-JCDl17 intersected:
14.1% Ni over 12.1 metres from a depth of 615.4 metres.
JCD117 is a wedge hole that was deviated part way down the primary hole JCD101. Collar coordinates of JCDl17 are therefore the same as JCD101 ie 6944740mN/261000mE; -60(deg)/270(deg).
JCD117 successfully intersected the mineralisation equidistant between, and about 20 metres updip to the west from the earlier intercepts in JCD101 (17.8m @ 8.3% Ni) and JCD102 (14.35m @ 5.35% Ni).
Due to the large widths and high grades in the central core of the deposit, further drilling is currently being undertaken to expand its dimensions in this area. In addition, Jubilee also has two other diamond drill rigs currently drilling the strike and dip extensions of the deposit.
Gold production for the June quarter was 212,135 ounces, compared with 205,328 ounces in the March quarter and 180,897 ounces in the corresponding June quarter of 1999.
Gold production for the six months ended 30 June, 2000 was 417,463 ounces compared with 296,198 ounces in the corresponding period in 1999.
This result was better than planned due to higher than expected ore grades from the Stage 3 pit particularly around previously mined underground stope areas. Gold production for the whole year has consequently been revised upward by 50,000 ounces and is now expected to be nearly 800,000 ounces.
Ore extraction in Stage 3 is on schedule with ore exposure exceeding model predictions. Presently mining is successfully being carried out between the stopes of the former underground workings. This situation is expected to continue until the end of the year. Waste pre-stripping for Stage 4 is slightly behind schedule but progressing well.
HIGHLIGHTS
HIGHLIGHTS
HIGHLIGHTS
The company was admitted to the official list of the Australian Stock Exchange and quotations of its securities commenced on 30 June 2000.
The Company successfully recommenced operations at the Selwyn Project in March 2000 with ore being mined from the Mt Elliott Mine and processed through the plant at Selwyn.
Cash costs of production for the quarter were US$0.56cents/lb of copper or 5% below the Prospectus forecast of US$0.59cents/lb of copper. The grade of ore mined and milled was below forecast, however the impact of the lower grades treated was mostly offset by the higher recoveries achieved for copper.
At the Mt Elliott mine, high grade Corbould ore was accessed towards the end of the quarter. The full impact of this ore source should be realised during the September quarter. Stope definition drilling in the upper levels of the Corbould section during the quarter returned the following significant intersections;
MEQ-00-703 38.7metres @ 10.8% Cu and 3.4g/t Au
MEQ-00-704 19.0metres @ 5.9% Cu and 2.3g/t Au
MEQ-00-707 18.0metres @ 21.0% Cu and 6.6g/t Au
MEQ-00-708 12.0metres @ 5.62% Cu and 3.12g/t Au
Deeper ore grade intersections in the Corbould section, at the Mt Elliott Mine, and below the known workings, returned the following significant results;
MEQ-00-714 21.0metres @ 8.6% Cu and 7.3g/t Au
MEQ-00-716 19.0metres @ 3.6% Cu and 2.2g/t Au
MEQ-00-718 22.0metres @ 5.0% Cu and 3.7g/t Au
An economic study on the viability of the Area 276 Mine was well advanced at the end of the quarter. A decision to mine this deposit, based on the outcome of the study, will be made during the September quarter. A significant diamond drill intersection was made approximately 100 metres below the deepest workings, returning 19 metres @ 3.52% Cu and 1.04g/t Au within a broader zone of 36 metres @ 2.76% Cu and 1.64g/t Au.
A scoping study on the potential of the Mt Dore leach/SX/EW project has been commissioned with a view to understanding the potential of this project to be developed as a stand alone operation.
QUARTER HIGHLIGHTS FOR SOUTH PACIFIC PETROLEUM AND CENTRAL PACIFIC MINERALS
Tap Oil advises that the Linda-1 exploration well spudded at 02.30 hours on 17 July 2000.
LOCATION
The well is located in TL/1, 17.5 kilometres north-east of Varanus Island at latitude 20deg 32' 54.13"S and longitude 115deg 41' 48.36"E.
PROGRESS
As at 6.00am 17 July, the well has drilled ahead to 801 metres measured depth and will continue to drill ahead to the planned total depth of 3,132 metres measured depth.
TAP COMMENT
The Linda-1 well is targeting a new play concept for the Carnarvon Basin.
The Linda prospect comprises an interpreted Biggada submarine slope fan deposit of Jurassic age deposited along the eastern margin of the Carnarvon Basin. The prospect has a distinctive seismic character which comprises a thick wedge of Jurassic sediments deposited basinward of the Gipsy/Rose/Lee discoveries. No other well has penetrated this type of seismic response, and several follow up leads and prospects have been identified.
Should the well prove successful, mean reserves are estimated at 20 mmbls with an upside of 55 mmbls (P10).
The well is expected to take 10 days to reach the planned total depth of 3,132 metres.
Production for the full year of 4,144 tonnes U(3)O(8) (1999: 4,375 tonnes U(3)O(8)) was in line with the Company's announced production for 1999/00 of around 4,000 tonnes.
Production in the quarter was 911 tonnes U(3)O(8) compared with 736 tonnes U(3)0(8) in the corresponding quarter of last year.
Production for the 2000/01 year is expected to increase to around 5,000 tonnes U(3)O(8) in line with expected sales.
EXPLORATION
NORTHAMPTON - WESTERN AUSTRALIA
Hillcrest has been restricted in exploring further at Northampton because of the size of its current land holdings. In an effort to resolve this problem Hillcrest has issued a plaint against an adjacent tenement holder. If the plaint is successful, Hillcrest will be granted a prior right to peg over the area of the surrounding Exploration Licence. There are a number of targets to be tested in this adjoining EL including the extensions of the Baddera and Wheal Ellen mineralisation previously tested by Hillcrest as well as several interesting aeromagnetic anomalies.
If Hillcrest can successfully expand its land holding at Northampton it intends to explore these known targets.
WARROO - QUEENSLAND
At Warroo there are stockpiles containing 300,000 tonnes of crushed rock and 1,000,000 tonnes of broken rock. This material appears to be suitable as road base and testing to confirm this is well advanced. On completion of the testing stage Hillcrest will be looking to sell the dumps.
CORPORATE
During the quarter, the Company acquired a 6.2% shareholding in Vincorp Wineries Limited by way of subscribing for 3,750,000 shares in Vincorp at 10 cents each.
At the end of the quarter the Company had cash reserves of $1.59 million.
OVERVIEW
* Mine production - a record 98,897 ounces (73,189 ounces)
- twelve months, a record 323,646 ounces, up 44 percent
- Callie ore production and mill throughput achieve target rates
* Gold sales - 101,311 ounces (74,524 ounces)
* Cash margin - $267 per ounce ($260 per ounce)
- net average realised gold price $568 per ounce ($587 per ounce)
- total cash cost $301 per ounce ($327 per ounce)
* Cash and bullion, net of $11.0 million debt
- $4.6 million (unaudited) at 30 June 2000
* Hedge book
- mark-to-market value $44.2 million (unrealised)
- positions decline by 89,370 ounces
(no new or replacement contracts established)
* Groundrush feasibility study proceeding
* Financial results for the three months and twelve months to
30 June 2000 will be released 23 August 2000
WMC's second quarter production achieved new highs in copper, uranium and alumina; positioned fertilizer production at more than 80 per cent capacity for the second half,and made two significant exploration discoveries in Western Australia.
Olympic Dam's production for the quarter was a record 48,314 tonnes, with the new solvent extraction plant set to assist in producing 200,000 tonnes of refined copper this year. Alcoa World Alumina and Chemicals (AWAC) alumina operations set new production records at Kwinana, Wagerup and Pinjarra. Nickel exceeded production targets for metal, matte and concentrate. The solid production and cost performance will deliver a healthy half-yearly profit. Gold production was up on the previous two quarters, and St Ives received Government environmental approval for further potential development on Lake Lefroy.
At West Musgrave in Western Australia, intersections of nickel, copper, Platinum Group Metals and titanium were found. And at the St Ives Gold Operation, new and significant area of gold mineralisation were defined that would support the further expansion of St Ives.
The successful production has allowed WMC to progress to the half-way mark of the five per cent share buy back and repay $235 million of debt.
WMC's second quarter production achieved new highs in copper, uranium and alumina; positioned fertilizer production at more than 80 per cent capacity for the second half,and made two significant exploration discoveries in Western Australia.
Olympic Dam's production for the quarter was a record 48,314 tonnes, with the new solvent extraction plant set to assist in producing 200,000 tonnes of refined copper this year. Alcoa World Alumina and Chemicals (AWAC) alumina operations set new production records at Kwinana, Wagerup and Pinjarra. Nickel exceeded production targets for metal, matte and concentrate. The solid production and cost performance will deliver a healthy half-yearly profit. Gold production was up on the previous two quarters, and St Ives received Government environmental approval for further potential development on Lake Lefroy.
At West Musgrave in Western Australia, intersections of nickel, copper, Platinum Group Metals and titanium were found. And at the St Ives Gold Operation, new and significant area of gold mineralisation were defined that would support the further expansion of St Ives.
The successful production has allowed WMC to progress to the half-way mark of the five per cent share buy back and repay $235 million of debt.
New Nickel Company to List this Month
Australia's latest nickel float, Western Areas NL, is scheduled to list before the end of the month and immediately initiate an intensive few months of drilling on already well advanced nickel sulphide targets in Western Australia. First results are expected within six weeks.
Western Areas has tied up complete geological belts covering 1,850sq km of WA's Yilgarn Craton with extensive, advanced sulphide nickel plays west, north and east of Kalgoorlie. It has already identified 21 priority drilling targets -- several with potential to host high grade deposits similar to Jubilee's producing Cosmos mine in WA -- and has earmarked $1.3 million for the first year exploration program.
The company has raised about $3.7 million from a prospectus that will see only 20.4 million 20c shares tradeable on the Australian Stock Exchange before another 10 million shares come out of escrow over the next 12 months. The prospectus closed this week.
"We are delighted with the way Western Areas has been accepted. It is a very tightly held company and we are now instigating a substantial diamond drilling program on three well advanced targets. The next two-three months will be very exciting," Western Areas Managing Director Julian Hanna said today.
"We are also evaluating other nickel sulphide properties and joint venture opportunities to expand the company's horizons beyond this prospectus," he said.
Diamond drilling on three targets at 100%-owned Mt Jewell, 60km north of Kalgoorlie and 25km NW along strike from the high grade Silver Swan nickel sulphide mine (which had a resource of 500,000t at 9% nickel), is scheduled to begin next week. These tenements already have a small inferred resource of 86,000t grading 2% nickel and intersections including 1.5m at 4.9% nickel, 6.6m at 2.7% and 1.9m at 2.6%.
At 100%-owned Cundeelee and Plumridge, east of Kalgoorlie, 2 layered mafic/ultramafic intrusive complexes have been identified with the potential to host large, nickel/copper and polymetallic deposits. A 700-metre diamond hole is scheduled for early August to test a porphyry intrusion into the main Cundeelee complex.
Soon after listing, shareholder and underground mining contractor Barminco is scheduled to begin drilling the Quinn Hills tenements in the Mt Alexander region, 250km north of Kalgoorlie, where recent drilling yielded a high-grade gold intersection of 9m at 17g/t from 137m, including 1m at 36.3g/t. Barminco can spend $400,000 to earn 70% in Quinn Hills.
JUNE QUARTER - SUMMARY:
CORPORATE
The Directors are actively seeking a suitable project that has the potential to create growth for Alliance Gold Limited.
MALDON GOLD PROJECT (100%)
A revised structural interpretation of the Maldon Gold Field is in draft form to be published by the Victorian government. This should generate new exploration targets in a gold field, that has produced over 1.75 million ounces of gold.
Meanwhile the project remains on care and maintenance and is available for sale or joint venture. From time to time part of the Porcupine Flat treatment plant is being hired by a contractor to extract gold from used carbon.
CRESWICK GOLD PROJECT (70% - 100%)
There was no exploration during the quarter
ENCORE METALS NL (40%)
The feasibility study into producing zinc from the Zeehan stag dumps has been suspended because the project appears uneconomic at present, without additional resources.
ALLMED TECHNOLOGIES LIMITED (5%)
The development of Allmed as a new IT healthcare company is being reassessed following the initial technical and industry studies.
Drillsearch adviseD that its Canadian subsidiary, Circumpacific Energy Corporation ("Circumpacific") has reported that the 4,500 metre Devonian Gas Well in which is it participating is now anticipated to commence drilling on or about 24th July, 2000.
JUNE QUARTER - SUMMARY:
GRD's business base is represented by three operations. During the quarter the business names of these changed to:
Gold: GRD Macraes
Resource Solutions: GRD Minproc
Construction: GRD Kirfield
GRD generated $54 million of revenue for the quarter (44% Gold, 33% Resource Solutions and 23% Construction).
Profit Continued to improve to $7.4 million for the quarter.
With the merger of Minproc completed in early April, the second quarter is the first in which the potential of GRD's business model is evident.
The Macraes Gold Project continued to perform well. The second half of 2000 is expected to see slightly less production at marginally increased cash cost per ounce.
GRD Minproc had an excellent quarter, with profit ahead of forecast and substantial new and exciting work won.
GRD Kirfield appointed a new management team led by Dario Amara, providing further skills in the development of its construction business. GRD Kirfield secured additional work in Africa during the quarter, providing an enviable competitive position amongst its peers.
JUNE QUARTER - SUMMARY:
DETAILED REVIEW OF OPERATIONS
ACTIVITIES
WORLD SCALE AMMONIA/UREA PROJECT
Plans for the company's world scale ammonia/urea project progressed satisfactorily during the quarter.
There was minor slippage in the completion of final capital cost estimate for the Project, and this was ultimately delivered to Project Participants at a Project Participants' meeting held in Milan on 19 and 20 June 2000.
The capital cost optimisation process which was embarked upon by the Project's prime contractor and technology provider, Snamprogetti SpA, in conjunction with Thiess Contractors Pty Limited in March 2000, proved to have been very beneficial and a significant reduction in capital cost has been achieved.
The final capital cost estimate presented to Participants provides a sound basis for proceeding forward with the project and several other options for further reducing capital cost are being investigated including the outsourcing of power generation. The outsourcing of power would result in a further significant reduction in capital cost, but this would come at the expense of a modest increase in operating costs and the cost benefits of this trade-off are currently subject to detailed study.
Plenty River was also given authority at the Milan meeting to finalise gas supply and product off-take agreements by the end of July 2000. It was also agreed that the short list for the project's urea off-take should be reduced to Cargill Australia Limited and Helm Dungemittel of Germany, and final negotiations with these companies are taking place.
Plenty River is currently preparing a Project Information Memorandum comprising essentially of a status report which is being circulated to Participants with a view to Participants obtaining Board approval by 31 July 2000, to proceed with the completion of the Bankable Feasibility Study and other activities necessary to secure financial close.
MINERAL EXPLORATION
NULLAGINE PROSPECT, WESTERN AUSTRALIA
A program of geochemical stream sediment sampling, rock chip sampling and airphoto base mapping was undertaken during the quarter. Access to the general tenement area was restricted due to high rainfall in the region.
Helicopter support enabled the collection of 75 Stream sediment samples and 5 rock chip samples. Assay results are awaited. Geological maps are currently in preparation.
The processed imagery from the geophysical and remote sensing surveys undertaken last quarter was received from the contractors. An interpretation of this data in conjunction with the recent field work will be completed during the next quarter.
COANJULA DIAMOND PROJECT, NORTHERN TERRITORY
The Northern Territory Department of Mines and Energy have advised that the Coanjula exploration licence applications are to be processed in accordance with the right to negotiate provisions of the Commonwealth Native Title Act (1993).
OTHER PROSPECTS
There are no further developments to report in relation to the company's Vettersburg Gold Prospect.
CORPORATE AND FINANCIAL
FINANCIAL
A total of 200,000 of the company's listed 31 July 2002 options were exercised during the quarter, resulting in the cash inflow of $40,000.
Further, as announced on 7 June 2000, Thiess Contractors Pty Limited (Thiess) subscribed for 1,000,000 ordinary shares in Plenty River at an issue price of 25 cents, as the first leg of all agreement to subscribe for a total of 4,011,036 ordinary shares in the company. This placement raised a further $250,000 which is being applied for working capital purposes.
The second tranche of the placement is contingent upon the execution by the participants in Plenty River's ammonia/urea project of an agreement to complete the Bankable Feasibility Study currently under preparation by Plenty River, and to proceed with project financing.
The second tranche is also subject to Plenty River and Thiess executing Heads of Agreement in relation to the development of a plant to produce ammonium nitrate. Plenty River and Thiess will investigate the feasibility of such a plant which would be located on the Barrup Peninsula and utilise as feedstock, surplus ammonia produced by the ammonia/urea plant.
Thiess, which is one of Australia's leading integrated engineering service providers, and a wholly owned subsidiary of Leighton Holdings Limited, is a major consumer and supplier of explosive grade ammonium nitrate, both in its own operations and through its subsidiary Quantum Explosives Pty Ltd.
Under the terms of the Subscription Agreement executed between the company and Thiess, a portion of the second tranche funds will be applied to the establishment of a project office for the ammonia/urea project in Perth, which will utilise facilities and personnel provided by Thiess.
The pricing of the second tranche is subject to reduction if the weighted average price of the ordinary shares of the Company traded on the ASX over the 7 business days immediately prior to the second tranche completion date, is less than 20 cents.
Plenty River has also agreed to issue to Thiess, subject to shareholder approval (to be obtained by no later than 31 December 2000), a total of 4,000,000 options to acquire ordinary shares in Plenty River at an exercise price of 50 cents each, exercisable on or before 31 July 2003.
Croesus Mining NL have announced that followup reverse circulation (RC) and diamond drilling completed at the Giles prospect near Davyhurst had yielded significant gold results.
Holes were completed over a 400m long zone where earlier RAB and RC drilling had indicated significant gold anomalism.
The drilling results from the Giles prospect are considered very encouraging and include:
15m @ 3.37g/t from 30m
40m @ 4.10g/t from 40m
25m @ 1.93g/t from 50m
15m @ 4.50g/t from 35m
6m @ 25.8g/t from 29m
10m @ 20.2g/t from 45m
8m @ 9.10g/t from 82m
32m @ 9.90g/t from 83m
8m @ 9.40g/t from 51m
PRODUCTION AND ACTIVITY REPORT JUNE QUARTER 2000
PRODUCTION
NORTH STRADBROKE ISLAND
3 MONTHS TO 30/06/00
Rutile production -tonnes 19,898
Ilmenite production -tonnes 24,374
Zircon production -tonnes 12,658
Combined production of rutile and zircon in the 3 months to 30 June 2000 was 20% above the March quarter, reflecting increased output from the recently commissioned Yarraman mine.
Rutile and zircon production for the 6 month period ending 30 June 2000 was lower than the corresponding period due to a low post commissioning contribution from Yarraman in the first quarter of 2000.
MINERAL SANDS EXPLORATION
HERRING-ENTERPRISE ORE BODY, NORTH STRADBROKE ISLAND
In December 1999 CRL commenced an extensive exploration drilling program as part of the upgrading of the Herring-Enterprise reserve from probable to proven reserve status.
In the six months to 30th June 2000 a total of 12,733 meters were drilled in this program. Total exploration expenditure during this period was $333,000.
QUARTERLY REPORT HIGHLIGHTS
PROFIT
DIVIDENDS
GROWTH
JUNE 2000 QUARTERLY REPORT
PRODUCTION SUMMARY: APRIL TO JUNE 2000
TOTAL TONNES
Ruble 55,409
Synthetic Rutile 97,091
Ilemenite(1) 354,853
Zircon 91,367
Hyti 91 2,608
Tin in Concentrate 2,557
Coal
1 Total ilmenite production
Presentation: The West Angelas Development:
The West Angelas Development represents the most exciting new chapter in North's involvement in the Australian iron ore industry through Robe River Iron Associates, which is a joint venture comprising North Limited 53%, Mitsui Iron Ore, 33%, Nippon Steel Corporation 10.5% and Sumitomo Metal Industries Ltd 3.5%.
There have been a number of misconceptions in the market about the impact of West Angelas production on our existing contracts with the presumption being made that this would result in the substitution in the market of a quantity of Mesa J ore.
CURRENT STATUS
Current probable reserves in Deposits A and B at West Angelas total just over 440 million tonnes. Deposit A alone contains a probable reserve of 306 million tonnes at 62.3% Fe. We are confident that the total West Angelas resource will ultimate supply at least 1 billion tonnes of Marra Mamba ore.
Previous drilling data will be supplemented by a further program of approximately 46,000 metres of infill RC drilling which is currently underway in the area of Deposit A, allowing fine tuning of the existing geological model sufficiently to allow the existing Mineral Resource to be reestimated and upgraded. Results will also enable further detailed mine planning, scheduling and metallurgical testing to be carried out.
The program is on schedule with respect to both time and budget.
Construction work on the ground currently includes the centreline trace for the new rail line, which has been cleared. Site investigation activities, including geotechnical studies and establishment of water supply, are continuing. At the plant site, work is in hand on upgrading road access, extending the airstrip, and preparing for establishment of the accommodation village.
Tap Oil NL provides the following update on the West Gipsy-1 exploration well which spudded on 8 July 2000.
LOCATION
The well is located in TL/l, 14 kilometres east of Varanus Island and 1.1 kilometres west of the Gipsy Oil Field at latitude 20 degrees 38'49.97"S and longitude 115 degrees 42'39.27"E.
PROGRESS
As at 6.00am today, the well has drilled ahead to the total depth of 2,519 metres measured depth. The well intersected the target North Rankin Sandstones at a depth of 2,216 metres measured depth being 51 metres higher than prognosed. The well failed to encounter a hydrocarbon accumulation and following wireline logging, will be plugged and abandoned as a dry hole.
TAP COMMENT
Although the well failed to encounter a hydrocarbon accumulation, the target North Rankin, Brigadier and Mungaroo reservoirs were intersected significantly higher (approximately 50 metres) than expected. As a result this will require re-mapping of the seismic data including a revision of the depth mapping over the Gipsy and Gipsy North oil fields.
SANTOS LIMITED - SUMMARY OF DRILLING
WEEK ENDING 13/07/2000
QUEENSLAND
WELL: Stokes 7
TYPE: SWQ Unit Gas Development
LOCATION: PL 84, Total 66 Block, 1.3km NE of Stokes 6, 1.7km E of Stokes 4, and some 130km SW of the Ballera Gas Centre
STATUS AT 13/07/2000 0600 HOURS: Conducting wiper trip prior to running production casing. The well is to be cased and suspended as a Permian gas producer. The well reached a total depth of 2609m, with 567m progress for the week
PLANNED TOTAL DEPTH: 2591m
WELL: Challum 18 DW1
TYPE: SWQ Unit Gas Development
LOCATION: PL 59, Aquitaine B Block, 1.25km NE Challum 1 and 20km W of the Ballera Gas Centre
STATUS AT 13/07/2000 0600 HOURS: The well has been completed as a gas producer from the Permian Toolachee Formation. The upper lateral objective was abandoned due to mechanical difficulties. Challum 18 DW1 reached a total measured depth of 2902m. The rig was released on 09/07/2000 and is currently moving to Challum 17
PLANNED TOTAL DEPTH: DW1 3121m MD
WELL: Wippo East 1
TYPE: SWQ Unit Gas Exploration
LOCATION: ATP 259, Naccowlah Block, 3.1km ESE of Wippo 1, 6.6km NNE of Wippo South 2, and some 30km NE of the Ballera Gas Centre
STATUS AT 13/07/2000 0600 HOURS: Conducting wiper trip prior to running surface casing. Current depth and progress for the week is 876m. The well spudded on 10/07/2000
PLANNED TOTAL DEPTH: 2637m
WELL: Merivale 9
TYPE: Gas Development
LOCATION: PL 44, Denison Trough, 0.2km NNW of Merivale 2, 0.5km N of Merivale 8, and some 140km N of the township of Roma
STATUS AT 13/07/2000 0600 HOURS: Merivale 9 has been completed as a gas producer. The well reached a total depth of 1569m, with 118m progress for the week. Open hole flow tests of the Staircase Sandstone and the Reids Dome Beds at a depth of 1549m resulted in a final flow rate 56,240 cubic metres (1.986 million cubic feet) per day. The rig was released on 08/07/2000
PLANNED TOTAL DEPTH: 2107m
WELL: Merivale 10
TYPE: Gas Development
LOCATION: PL 44, Denison Trough, 690m SSE of Merivale 8, 680m SW of Merivale 5, and some 140km N of the township of Roma
STATUS AT 13/07/2000 0600 HOURS: Waiting on rig repairs. Current depth and progress for the week is 252m. The well spudded on 10/07/2000
PLANNED TOTAL DEPTH: 2300m
SANTOS LIMITED - SUMMARY OF DRILLING
WEEK ENDING 13/07/2000
OFFSHORE WESTERN AUSTRALIA
WELL: Triller 1
TYPE: Exploration Wildcat
LOCATION: TL 3, Offshore West Coast Barrow Island, WA
STATUS AT 13/07/2000 0600 HOURS: Triller 1 has been plugged and abandoned. Triller 1 reached a total depth of 1526m, with no progress for the week. The rig was released on 07/07/00.
PLANNED TOTAL DEPTH: 1552m
WELL: Stag 21H
TYPE: Oil Development
LOCATION: WA-15l, Barrow Basin NW Shelf, Offshore WA
STATUS AT 13/07/20000 0600 HOURS: Pulling out of hold for bottom hole assembly change prior to drilling ahead. Current depth and progress for the week is 319m. The well spudded on 10/07/00.
PLANNED TOTAL DEPTH: 1196m
USA WELL: Webb 1
TYPE: Gas Exploration
LOCATION: Suemaur Moore Prospect, San Patricio County, Texas
STATUS AT 12/07/2000 0600 HOURS: Drilling ahead. Current depth is 3822m, with 622m progress for the week.
PLANNED TOTAL DEPTH: 4115m
WELL: State Tract 157#1
TYPE: Gas Exploration
LOCATION: South Long Reef Prospect, Aransas County, Texas
STATUS AT 12/07/2000 0600 HOURS: Drilling ahead. Current depth is 3749m, with 580m progress for the week.
PLANNED TOTAL DEPTH: 3048m
WELL: Mew Estate 1
TYPE: Gas Exploration
LOCATION: Edge-Queen City 111 Prospect, Duvual County, Texas.
STATUS AT 12/07/2000 0600 HOURS: Mew Estate 1 has been cased and suspended as a future gas producer. The well reached a total depth of 2698m, with no progress for the week. The rig was released on 12/07/00.
PLANNED TOTAL DEPTH: 2743m
SANTOS LIMITED - SUMMARY OF DRILLING
WEEK ENDING 13/07/2000
SOUTH AUSTRALIA
WELL: Moomba 116
TYPE: Gas Development
LOCATION: PPL 7, Moomba Block, 1.6km W of Moomba 91, 1.0km SW of Moomba 113, and some 9km NW of the Moomba Gas Plant.
STATUS AT 13/07/2000 0600 HOURS: Moomba 116 has been cased and suspended as a future Permian gas producer. The well reached a total depthof 2783m with 79m progress for the week. The rig was released on 09/07/00 and moved to Moomba 114, a PPL 7 gas development well.
PLANNED TOTAL DEPTH: 2789m
WELL: Moomba 114
TYPE: Gas Development
LOCATION: PPL 7, Moomba Block, 1.1km SE of Moomba 74, 1.0km NNE of Moomba 71, and some 9km NW of the Moomba Gas Plant.
STATUS AT 13/07/2000 0600 HOURS: Running wiper trip prior to running surface casing.
Current depth and progress for the week is 920m. The
well spudded on 12/07/00.
PLANNED TOTAL DEPTH: 2759m
WELL: Pondrinie 17DW1
TYPE: Gas Development
LOCATION: PPL 90, Merrimelia-Innamincka Block, 1km WNW of Pondrinie 15DW, 1.8km WSW of Pondrinie 8 and 75km NE of the Moomba Gas Plant.
STATUS AT 13/07/2000 0600 HOURS: The well has been completed as a Permian gas producer. The well reached a total depth of 2602m MD with no progress for the week. The rig was released on 08/07/00 and moved to Meranji 20, a PPL35 gas development well. Pondrinie 17DW is a high angle gas development well designed to drain gas reserves in the Permian aged Toolachee and Tirrawarra/Merrimelia Formations.
PLANNED TOTAL DEPTH: 2820m
Oil Company of Australia Limited, on behalf of the PL 44 Joint Venture, advises that:
Merivale No 10, a gas appraisal well situated approximately 690 metres south-south-east of Merivale No 8, lattitude 25 deg 33 min 38.85 sec south, longitude 148 deg 20 min 13.68 sec east, was spudded at 23:30 hours on July 10, 2000. Surface casing was set at 250.1 metres RT. At 06:00 hours today the rig was waiting on a new blow out preventor to arrive from Adelaide, before mud drilling ahead in the intermediate section. Progress for the week was 252 metres.
The primary targets of the well are the Aldebaran, Staircase and Reids Dome Sandstones.
Pima Mining NL has announced that its 80% owned subsidiary, SAMAG Limited, has decided to build its proposed magnesium metal processing facility at the Weeroona site, located adjacent to National Highway No 1, approximately eight kilometers northeast of Port Pirie.
Options to purchase land have been negotiated over a total area of 940 hectares and further land will be acquired to provide an appropriate buffer zone. The land on which the plant will be built is freehold land currently used for cereal cropping.
The Weeroona site has been selected following a comprehensive and exhaustive evaluation of sites both Interstate and in South Australia. Key requirements for the site include the availability of land, proximity to standard gauge railway, coolant and process water availability, access to a skilled labour force and low labour costs, environmental issues, port facilities and road access.
Alcaston Mining NL advises that the company has acquired an option over a promising South Australian diamond exploration prospect located in the Terowie Kimberlite Field.
The granted Exploration Licence, EL2575, is located approximately 200km north-northeast of Adelaide in the central Flinders Ranges, adjacent to the Barrier Highway and covers a distinctive, circular topographic feature known as Hiles Lagoon. (Location and gravity maps over Hiles Lagoon are attached).
PRE-FEASIBILITY BUDGET APPROVED FOR GINKGO DEPOSIT
BeMaX Resources advises that the BIP Joint Venture Parties have agreed to a budget for the pre-feasibility study on the Ginkgo Deposit, which is to commence immediately. It is anticipated that the study will be completed in October 2000.
The Ginkgo Deposit is the largest contiguous Indicated Resource of heavy mineral defined to date in the Murray Basin. Snowden Mining Industry Consultants recently estimated an Indicated Resource of 252 million tonnes at 2.8% heavy mineral, at a cut off grade of 1%, which was announced on the 2 May 2000. Ginkgo’s favourable grade, grain size, mineralogical and slimes characteristics make undertaking feasibility studies an obvious high priority.
FLETCHER CHALLENGE ENERGY DRILLING & PRODUCTION TESTING REPORT (CONTINUED) FOR THE WEEK ENDING 12/07/2000
Country : New Zealand
Block Area : PML 381012
Well Name : MB-6
Objective : Horizontal development well in the Maui B D1.10 oil reservoir.
Current Status : * Suspended well with stuck 4(1/2)" liner pending evaluation of sidetrack or completion options while operations proceed on MB-7.
Country : Brunei
Block Area : Block CD
Well Name : EEG-(1)
Objective : Stacked Pliocene Shelf Sand objectives 3,400-4,600m
Current Status : * Set 9(5/8)" casing @ 3,907m.
* Run cement.
* Performed FIT.
* About to drill primary objective @ Plio850 to
Plio900 level.
DRILLING SUMMARY REPORT FOR THE WEEK ENDING 12/07/2000
Country : Canada
Block Area : Mikwan
Well Name : 5-28-37-23 W4M
Objective : An Exploratory well testing Basal Belly River Gas.
Current Status : * Spud: 04/07/2000.
* D & A.
* Rig Released: 09/07/2000.
Block Area : Baldwinton
Well Name : A13-10-44-23 W3M
Objective : A Development well testing Sparky Oil
Current Status : * Spud: 02/07/2000
* Cased for Sparky Oil.
* Rig Released: 05/07/2000.
Block Area : Hatton
Well Name : 12-34-14-26 W3M
Objective : A Development well testing Milk River/Medicine Hat Gas
Current Status : * Spud: 10/07/2000.
* Cased for Milk River/Medicine Hat gas.
* Rig Released: 11/07/2000.
Block Area : Hatton
Well Name : 2-1-15-26 W3M
Objective: A Development well testing Milk River/ Medicine Hat Gas.
Current Status: * Spud: 12/07/2000
* Drilling ahead
FLETCHER CHALLENGE ENERGY DRILLING & PRODUCTION TESTING REPORT (CONTINUED) FOR THE WEEK ENDING 12/07/2000
Country : New Zealand
Block Area : PML 38036
Well Name : McKee-2B/C
Objective : Sidetrack development infill well in the McKee oil reservoir.
Current Status : * Intersected top McKee within expected range.
* Lost circulation after drilling 20m into the
McKee, likely due to the intersection of a
substantial fracture/fault.
* Unable to regain circulation.
* Abandoned McKee-2B and set kick-off plug at
1,915mAHKB.
* Drilling McKee-2C with target location 75m NE of
original location.
* Current depth at 2,108mAHKB, estimated TD is
2,345mAHKB.
Block Area : PML 381012
Well Name : MB-7
Objective : Horizontal development well in the Maui B D1.10 oil reservoir.
Current Status : * Operations suspended for four days waiting for weather to enable re-supply of equipment and chemicals.
* Drilled out shoe track and drilled 6" hole to
3,457m.
* Successfully completed LOT.
* Drilled 6" hole from 3,457m to 3,499m building
angle to horizontal.
* Current operation @ 0600hrs 13th July, changing
drilling assembly to drill horizontal section.
A drilling program of approximately 5 partially cored boreholes and 5 RC holes has commenced at Mt Kelly located 120kms by road north of Mt Isa.
The program has been designed to extend the previously defined copper/gold mineralisation around borehole MK 475 as well as investigate two additional targets with potential for shallow gold mineralisation.
A recently defined target called the Mt Kelly West Prospect located approximately 500 metres south of the MK 475 mineralisation will be investigated. Anomalous gold grades ranging up to 16gms/tonne have been recorded from surface samples collected from a brecciated quartz/ironstone outcrop at the Mt Kelly West Prospect which is located near the interpreted intersection of several major fault structures.
Progress Report - Big Bell Underground
SUMMARY
* Seismicity Events at Big Bell Underground
DETAILS
A seismic event occurred in the lower levels of the Big Bell Underground Mine on 9 July causing limited damage to the 510 ore drive. Production from the lower levels was immediately halted and limited production is expected to recommence today after inspection by mine management and with the approval of the Department of Mines. Otherwise mine operations are continuing, including production from upper levels of the underground mine. The company's safety management systems and procedures have proven to be effective.
Mining operations are being rescheduled to ensure the continuing safety of the underground workforce, and will result in a short term 40% reduction to normal underground ore production rates. This will be substantially offset by access to stockpiled underground ore and increased production from Cuddingwarra open pits.
Expert assistance, including international consultants, will contribute to the redesign of the underground mining to assist in managing seismicity in the short term and to eliminate seismicity issues in the longer term. Normal underground ore production at the rate of 450,000 tonnes per quarter is anticipated by late in the December 2000 quarter.
The level of gold production forecast for the September quarter is estimated to be similar to that achieved in the June quarter, with improved recovery rates resulting from the new gravity circuit being commissioned this week.
MAIN FEATURES OF THE FOURTH QUARTER
IRON ORE
* Robe
- Established new production, productivity and shipping records.
- New annual sales record of 31.0mt (100% basis), including 4.3mt of lump.
- Annual productivity per employee increased by 33% compared with 1998/1999.
- West Angelas on schedule.
* IOC
- Increased mine tonnages resulted in concentrate and pellet production achieving above design levels. Pellet production for the quarter, of 3.1mt (100% basis), was up 100% on the previous corresponding quarter whilst concentrate production was up 15%.
- C$361m was approved by the North Board in May and IOC Board in June to refurbish the currently inactive Sept-lles pellet plant. This refurbishment will take two years to complete and will increase pellet production from 12.5 to 17mtpa. Sales commitments from customers are already in place for a portion of the 4.5mt pellet production and negotiations are continuing for the balance.
- IOC is expecting continued strong demand for concentrates and pellets from all regions and remains fully booked through calendar 2000
- Unit operating costs reduced to record lows in the fourth quarter as workplace change initiatives began to have effect. With further workforce reductions and a focus on improving the efficiency and design of work practices, costs will continue to fall significantly over the next two years and beyond.
- Revised vessel scheduling resulted in the slippage of 900,000 tonnes of concentrate (100% basis) and 500,000 tonnes of pellets (100% basis) into the first quarter 2000/2001. This should result in total sales exceeding 5mt for that quarter.
WOOD FIBRE
* North Forest Products
- Record annual export hardwood chip sales buoyed by continuing strong demand from both Japan and Indonesia.
URANIUM
* ERA
- Production is expected to increase from 4,144 to 5,000t U(3)O(8) in 2000/2001.
ZINC
* Zinkgruvan
- Concentrate production improved during the quarter with an increase in the number of underground operating faces and resolution of recent metallurgical issues.
- The annual level was down slightly due to short term lower zinc grades, partially compensated by record mill throughput.
COPPER-GOLD
* Northparkes
- Underground production returned to the pre-November 1999 levels. However, concentrate production was adversely impacted by the expected decline in head grades.
* Alumbrera
- As previously noted, metal grades were down on the previous corresponding quarter and year to date. These lower grades are in line with the mine plan and resource estimate. The lower grades together with a number of major plant maintenance works adversely affected mill throughput and in turn concentrate production.
CORPORATE
* Share buy back. North has purchased and cancelled 25 million shares with about 737 million shares remaining on issue.
* Exploration strategy has been repositioned, ie
- Advanced projects (no greenfields).
- Base metals (no gold).
- Near mine at Zinkgruvan and Northparkes.
- Reduced support infrastructure.
Fourth Quarter Activities Report Overview
Norwest Energy advises that it has reached agreement with the Tap Oil NL and Australian Worldwide Exploration Limited groups to "farm" into EP-364.
Norwest will earn 10% equity in EP-364 by funding an estimated A$420,000 of the "dry hole" drilling costs of the Lindsay 1 exploration well. The agreement is, as always, subject to approval by the appropriate government department.
Oil Company of Australia Limited, on behalf of the PL 44 Joint Venture, advises that:
Merivale No.9, a gas appraisal well situated approximately 220 metres north-north-west of Merivale No.2, latitude 25 deg 33 min 03.00 sec. South, longitude 148 deg 20 min 00.04 sec East, was spudded at 19:00 hours on June 24, 2000. Surface casing was set at 205.8 metres RT. Intermediate casing was set at 1439 metres RT. The well reached a total depth of 1560 metres RT at 04:30 hours, July 7, 2000. Rig released at 24:00 hours, July, 8, 2000. The well was completed with 73mm tubing set at 1453.8 metres RT. Progress for the week was 118 metres.
Bank of England held its seventh gold auction yesterday with analysts denying that it affected yesterday's gold prices, with a market finish 1.5 points lower.
CIBC World Market analyst, John Macdonald stated that "the last auction was a bit of a non-event, I don't see why this one would be any different".
An estimated 25 tonnes were to be sold at yesterday's auction.
BHP have announced that it had reached agreement with Falconbridge Limited on the formation of a Joint Venture which may lead to development of the Gag nickel laterite project in Indonesia.
The basis of the agreement is that Falconbridge would spend US$75 million to earn a 37.5 per cent interest in the Gag Island nickel project. It is expected the investment would primarily be directed towards completing a Gag Island project feasibility study, to be managed by Falconbridge, over the next 2 years.
Fourth Quarter Activities Report
PRODUCTION
Production for the full year of 4,144 tonnes U(3)O(8) (1999: 4,375 tonnes U(3)O(8)) was in line with the Company's announced production for 1999/00 of around 4,000 tonnes.
Production in the quarter was 911 tonnes U(3)O(8) compared with 736 tonnes U(3)0(8) in the corresponding quarter of last year.
Production for the 2000/01 year is expected to increase to around 5,000 tonnes U(3)O(8) in line with expected sales.
General Gold Resources has signed an agreement to sell the Mt Monger Gold Project to Solomon Resources Limited, a company listed on the Canadian Venture Exchange. Solomon entered into a Farm-in Agreement in August last year, whereby Solomon could earn a 70% interest in the Project through expenditures over four years.
The new agreement sells 100% equity in the Project to Solomon on the following terms:
GRD Kirfield have been awarded the mechanical and piping installation package for the Bulyanhulu Gold Project. The project is owned by Barrick Gold and the project development is being undertaken by SNC-Lavalin at a total project cost of US$280 million.
Bulyanhulu is located in Tanzania, Africa, and approximately 45 kilometres south of Lake Victoria.
GTN Resources Ltd has suspended detailed technical and commercial evaluation of the Tohono Copper Project (Project), located in southern Arizona on land owned by the USA in trust for the Tohono O'odham Indian Nation (Nation), pending resolution of an environmental permitting issue which has become apparent during the initial phase of GTN's due diligence program.
Molopo Australia announces that it has successfully completed the drilling of the LW-L2 well at its Liulin project, Shanxi Province, China. LW-L2 is the second well of a three well programme at Liulin.
Both the LW-L1 and LW-L2 wells have intersected the target gas saturated coal seams at the prognosed depth and thicknesses.
Natural waterflow from both wells indicates that initial coal permeability is good, as in the nearby HW-L1 well drilled in 1996.
Both new wells have now been cased and suspended pending fracture stimulation on completion of the three well drilling programme. An extended production test of wells LW-L1 to L3, together with the previously drilled HW-L1, will follow the stimulation programme.
Murchison United has announced that it had completed the sale of its Mt Cuthbert Copper Project following the successful ASX listing of Matrix Metals Limited.
The Company received A$5,000,000 for the sale of Mt Cuthbert that was satisfied by the issue of 20,000,000 shares in Matrix Metals. As a result, the Company holds approximately 39% of Matrix Metals and it is intended, following an agreed holding period of six months, that these shares be distributed to Murchison shareholders registered at that time.
The Stage Two drilling programme at the Centennial Project, Broken Hill NSW, will commence in late July/early August. Joint venturer Triako Resources Limited have planned a programme of ten (10) reverse circulation (RC) drillholes to follow up encouraging intersections of zinc mineralisation encountered in the Stage One programme completed in April this year. The Stage One programme comprised 22 RC holes all of which intersected strongly anomalous zinc values ranging from wide intervals at low grades (up to 36 metres at 1.16% zinc) to narrower higher grade intervals up to 3 metres at 8.9% zinc, and one metre at 9.66% zinc, 11.6% lead and 117g/t silver. The holes targeted a series of prospects defined using detailed geological mapping, rock-chip sampling and RAB drilling (see the accompanying plan).
The Directors announce the successful fracture stimulation (fraccing) of the Rodney Creek #4 and the Rodney Creek #7 wells.
Fraccing of the Rodney Creek #7 has been completed and stimulated with 79,000 lb 16 - 30 sand in two stages. The well has been cleaned out and the pumping system installed. The generator is scheduled to be hooked up and the pump test commenced by Wednesday 12 July.
The Rodney Creek #4 well has been stimulated with 180,000 lb of sand in two stages and is flowing back load fluid.
The Rodney Creek #5 well has had the lower interval completed (fraced with 42,000 lb sand) and is being cleaned out for perforating and stimulating of the upper zone.
The Rodney Creek #6 well has had the lower interval completed (fraced with 123,939 lb of 16 - 30 sand) and is being cleaned out for perforating and stimulating of the upper zone.
Rodney Creek #3 well was re-worked and put on pump on 29th June 2000 to supply water for the fraccing operation on the other 4 holes. The well is continuing to produce water and gas from the Betts Creek and Aramac coals. Gas flows are not being measured at the present time however we are continued to be encouraged by the fact of there being a gas flow at this stage of dewatering.
BHP has announced initial results from its appraisal well on the Atlantis discovery in the Atwater Foldbelt ultra deepwater area of the Gulf of Mexico. The well has encountered a significant oil zone in Miocene sands with net pay in excess of 300 feet. Drilling will continue through additional prospective zones. The well is expected to reach its planned total depth of 18 600 feet within the next several weeks.
WA-269-P TITANIA-1
Woodside, Operator of the WA-269-P Joint Venture, reports that the Titania-1 exploration well located in the Carnarvon Basin was spudded at 1845 hours on 6 July 2000. At 0600 hours (WST) on 11 July the operation was running into the hole to drill out the 9(5/8) inch shoe track.
The Marine 500 rig is drilling the well. The location is approximately 245 kilometres northwest of Karratha. Water depth at the location is 1501 metres. Current depth is 2433 metres and planned total depth is 3178 metres.
All reported depths (except water depth) are referenced to the rig rotary table.
The Solomon Islands Court of Appeal, comprising former Australian High Court Chief Justice Sir Anthony Mason, Mr Justice McPherson of the Queensland Supreme Court and Mr Justice Los of the National Court of Papua New Guinea, has upheld a judgement requiring Australian law firm Slater & Gordon and businessman Mr Denis Reinhardt to pay damages and costs to Ross Mining NL for civil conspiracy, abuse of process, champerty and maintenance. Ross Mining, a wholly owned subsidiary of Delta Gold Limited, is the owner and operator of the currently suspended Gold Ridge mine in Solomon Islands.
CLEAR BRANCH FIELD, JACKSON PARISH, NORTH LOUISIANA
The second well in the year 2000 program, The Terry Ewing No 1 well, is drilling ahead at 8,059 feet after running surface casing to 3,025 feet. The well is a 12,200-foot test of the Clear Branch Field Gas Prospect.
The location lies on trend with significant Hosston and Cotton Valley production which blankets a portion of North Louisiana. Hunt Oil discovered the field in 1976 and has produced in excess of 55 billion cubic feet of gas from multiple Hosston reservoirs.
Importantly, all of the gas completions within the field were natural and no infill drilling or stimulation has been applied at Clear Branch. Engineering studies suggest significant amounts of producible gas could remain within the Hosston reservoirs and be captured by wells drilled on smaller spacing.
MIKESKA-HAMILL FIELD PROSPECT, AUSTIN COUNTY, TEXAS
The third well in the year 2000 program, the Schulz-1 well, spudded on 9 July 2000 and is drilling ahead at 652 feet using Paterson Rig 127. The well is an 8,650-foot test of the Mikeska-Hamill Field Oil Prospect with an expected duration of around 20 days.
The Mikeska-Hamill Field is located in Northwestern Austin County.The most significant production in this field is from the Blum No 1 well which was drilled in 1986 and has produced 280,000 barrels of oil from the 8,600 foot Wilcox oil sand. Engineering studies suggest this well is part of a much larger reservoir.
FAIRYMOUNT OILFIELD RE-JUVENATION PROGRAM (MOSAIC 100%)
Mosaic Oil NL has installed an electric submersible pump on the Fairymount 8 well to look at reducing costs associated with standard beam (donkey) pumps. Fairymount 8 which was formerly producing 25 barrels a day is currently producing 41 barrels oil a day after one week and should require little servicing for 2 years.
Westgold NL announces that, through its wholly owned subsidiary Castle Hill Resources NL, it has reached agreement to sell all of its Tuckabianna tenements to New Hampton Goldfields Limited. The terms of the sale are that the Company will pay $300,000 to New Hampton and in return New Hampton will take full responsibility for the environmental bonds on Tuckabianna which amount to approximately $1,000,000.
As indicated in the previous quarterly report the Company has continued the rationalisation of its projects and sees the sale of Tuckabianna as achieving a large part of that rationalisation process.
The Company has reached agreement to acquire 100% of Tuckabianna. Past production from the area in recent years totalled approximately 550,000 ounces of gold from 6,420,000 tonnes at 2.7 grams per tonne of gold. Based on estimates prepared by previous owners and the work of independent consultants, Indicated and Inferred resources of 250,000 ounces are present beneath the more significant pits.
The mineralisation occurs over a strike length of 30 kilometres and is identified by 22 shallow open pits. Proposed exploration strategies will focus on drilling at depth, beneath the pits. Tuckabianna covers an area of 49 square kilometres and is situated within trucking distance of the company's Big Bell Gold Operations, 56 kilometres to the west.
The Vendor has paid $300,000 to the company for the acquisition of Tuckabianna. The company has taken over the environmental responsibilities, independently assessed to not exceed $820,000, by PPK Environment and Infrastructure Pty Ltd.
A review and compilation of all exploration data is currently in progress to define the priority exploration targets.
New Zealand Oil & Gas has advised that the NZOG group has adopted a programme to drill 11 wells in Australia and New Zealand during the 2000/2001 financial year.
The prospects to be tested cover a range of objectives and play styles, from appraisal wells designed to increase oil reserves and flow rates from existing production licences, through to wildcat drilling with huge potential.
PAN PACIFIC DRILLING PROGRAMME
Pan Pacific Petroleum has announced its plans for drilling during the 2000/2001 financial year.
The prospects to be tested cover the range of opportunities from appraisal drilling to high upside exploration.
The primary focus is the highly prospective Carnarvon Basin, and the first well to be drilled will be Tusk-1 in August. Tusk will be drilled to about 2000m to test Athol Formation and Mungaroo Formation targets with potential reserves of 10 and 30mmbbl respectively. Tusk lies between Corvus-1, which encountered thin oil bearing Athol Fm sands, and Oryx-1, which also encountered oil bearing sands in both the Athol and Mungaroo Formations.
NEAR TERM DRILLING PROGRAM
ONSHORE UK (ROC: 100%)
The Saltfleetby-5 appraisal well started drilling on 8th July. At 0600 hrs on 10th July (UK time) the operation was cementing 18-5/8" casing. The well is designed to test the gas potential of the Namurian sequence which underlies the main Westphalian gas reservoir. Planned depth is 3200 metres including, if warranted, a 300 metre horizontal section in the Namurian.
THE KYLE OIL FIELD (ROC: 12.5%)
Encouraged by the results of the Kyle Extended Well Test ("EWT") the Kyle Joint Venture has approved the drilling of an appraisal well on the northeast flank of the Kyle structure. This well is expected to start drilling within the week using the "Sovereign Explorer". If initial drilling results are encouraging, it is anticipated that the well will be drilled to a total depth of 3,800 metres, including a 750 metre horizontal section within the fractured chalk reservoir.
MONGOLIA (ROC: 100%)
At ROC's base camp in the Gobi Desert preparations continue for the drilling of two back-to-back wildcat exploration wells, the first of which is scheduled to start in mid-August.
SUMMARY OF PRODUCTION ACTIVITIES
SALTFLEETBY GAS FIELD (ROC: 100%)
During June 2000 the Saltfleetby Gas Field continued to produce at, or close to, plateau rates with an average gas production of 47.3 mmscf/d for the month. The field is now expected to come off plateau production during July 2000, significantly later than originally anticipated. Some ROC shareholders have enquired whether or not this better-than-expected production performance implies any change to the ultimate recoverable reserve potential of the Saltfleetby Field. ROC will not be able to provide a definitive response to this type of enquiry until later this year after it has completed further production testing, finalised the 3-D seismic interpretation and drilled Saltfleetby-5.
KYLE OIL FIELD (ROC: 12.5%)
The Kyle EWT continues with the single well flowing steadily at 13,000 BOPD with a stable gas-oil ratio and zero water cut. The first cargo of Kyle EWT oil, approximately 254,400 barrels (net ROC 31,800 bbls), was sold during the third week of June 2000. Another, similar-sized, lifting occurred in early July 2000. Both liftings were sold at a small premium to Brent.
MONGOLIA (ROC: 100%)
During June 2000 ROC's three producing wells in the East Gobi Basin in southern Mongolia produced at a combined average of 119 BOPD. ROC continues to export to China Mongolian crude oil which it produced and stored through the winter. A second cargo of approximately 7,000 bbls was transshipped during the first week of July 2000. A further, similar-sized shipment, is due to be exported within the next two weeks. The oil is sold at international prices, specifically at a modest discount to Minas
Following a Technical Meeting and Operating Committee Meeting on WA-261-P, Offshore Carnarvon Basin, on Friday 7, July 2000, Sun Resources NL confirms drilling activity for the period mid August to mid September 2000 on the Kudu, Chamois and Rhebok Prospects. The drilling timetable is on a dry hole basis which can be subject to both acceleration or operational delays (the latter more usual by add ons such as testing or coring operations) in the Operator's general multi-well programme on a number of permits.
The Operator, Apache Energy will use their newly contracted Ensco 56 drilling rig to commence the drilling programme on the Kudu Prospect which overlaps the northwest corner of WA-261-P and Apache controlled western adjacent WA-256-P. The crest of the Kudu Prospect lies within WA-261-P, but the prospect will be drilled in WA-256-P as a commitment well. It is similar in structural setting, objectives and size as the Chamois Prospect, 4 kilometres to the southeast.
The Chamois Prospect, a NW tilted upthrown fault block structure on the western side of a prominent NE trending regional fault, will be tested by a 1,529 metre deep well. Target reservoirs are the Lower Cretaceous M Australis Sandstone, specific sand members of the Lower Jurassic Athol Sandstone and the Middle Triassic S Quadrifidus Sandstone of the Mungaroo Formation. Target reserves are up to 28.6 million barrels of oil recoverable in the Athol and Mungaroo Formation objectives. From the 3D seismic a small gas accumulation is probable in the M Australis, but at this stage a potential resource estimate has not been made by the Operator. The Chamois Prospect is a look-a-like to the Oryx Prospect oil discovery made recently by Apache on the same regional fault structure some 10 kilometres to the northeast in WA-209-P. Any oil from Oryx can be expected to spill into Chamois.
Progress Report:
* Aquarius has secured its third mining project, Everest South, with an unclassified resource of 34.7mt @ 4.0 g/t PGM. This equates to 4.45 million ounces which is larger than both Kroondal and Marikana.
* Aquarius has also secured Chieftains Plain and a portion of Everest North to raise in-situ PGM ounces controlled by Aquarius to approximately 35 million.
* With Kroondal, Marikana and Everest South in production, Aquarius by late 2003 will have reached its stated goal of producing 500,000 ounces annually.
The company announces that diamond drilling has commenced at the Iron Princess Anomaly in the Middleback Ranges in South Australia. The Middleback Ranges Project is one of the Helix Resources NL - BHP Minerals Strategic Exploration Alliance projects.
The diamond drill hole has been designed to investigate a previously untested large coincident magnetic and gravity anomaly located at approximately 300 to 400 metres depth below the old Iron Princess iron ore workings.
Second Quarter Activities Report
NORSEMAN OPERATIONS
Gold production for the quarter was 22,893 ounces, which was steady on the previous quarter, despite a concentration on high grade low tonnage ore from the Harlequin and Bullen underground mines.
| QUARTER ENDED 30/06/2000 |
QUARTER ENDED 31/03/2000 |
QUARTER ENDED 30/06/1999 |
|
| Ore treated tonnes | 61,731 | 82,443 | 137,194 |
| Recovered grade grams per tonne | 11.91 | 8.55 | 5.80 |
| Gold produced ounces | 22,893 | 22,671 | 25,564 |
Quarterly Report April-June 2000
During the June 2000 Quarter, highlights included:
Tap Oil NL advises that the West Gipsy-1 exploration well spudded at 01:30 hours on 8 July 2000.
LOCATION
The well is located in TL/1, 14 kilometres east of Varanus Island and 1.1 kilometres west of the Gipsy Oil Field at latitude 20(deg)38'49,97"S and longitude 115(deg)42'39.27"E.
PROGRESS
As at 6:00am today, the well has drilled ahead to 1,454 metres measured depth and will continue to drill ahead to the planned total depth of 2,532 metres measured depth.
TAP COMMENT
The Gipsy-1 well will target two levels.
The primary objective consists of stacked sandstones of the North Rankin, Brigadier and Mungaroo Formations within a fault compartment immediately downdip of the Gipsy-1 oil discovery. The well will also be deepened to intersect the Mungaroo "B" sandstones not intersected in the Gipsy-1 well, but which has been shown to contain both oil and gas in the Rose and Lee wells. Should the well be successful, mean reserves are estimated to be 8.7 mmbls of oil.
The well will also intersect Jurassic aged Athol Formation higher in the section, within structural closure. Numerous oil shows have been encountered at this level in the Gipsy/Rose/Lee wells and in the Dorrigo-1 well immediately downdip, and the West Gipsy-1 well is designed to investigate sandstone reservoir development at this level.
The well is expected to take 5 days to reach the programmed total depth of 2,532 metres.
SHARE SALE AGREEMENT WITH IMPERIAL ONE LIMITED SIGNED TODAY
Imperial One Limited and BeMaX Resources NL have signed the Share Sale Agreement by which BeMaX Resources NL will acquire 100% ownership interest in Imperial Mining (Aust) NL. This will give the BeMaX group an additional 25% beneficial ownership in the BIP Joint Venture, which owns the Ginkgo heavy mineral deposit and other strandline prospects in the Murray Basin mineral sands province.
Boulder Steel's Joint Venture partner, Idaho Consolidated Metals Corp announce that it has mobilized a drill crew and equipment for Phase I drilling in the Stillwater Complex. The drill program will consist of 2,000 feet of NQ-sized core over six drill holes.
The first three holes will be located 1.3 kilometers south-east of the Stillwater Mine in the Mountain View area. Two targets are sited to test platinum group metal (PGM) mineralization associated with chromite seams. The third target is designed to test nickel/copper mineralization and the potential for associated PGMs. The remaining three of the six holes will be located 1.5 kilometers east of the Stillwater Mine in the Nye Basin area. Drill holes four through six will test chromite zones with anomalous PGMs.
General Gold Resources NL advise that the directors of the wholly owned subsidiary, General Gold Operations Pty Ltd (GGO), have appointed Garry John Trevor and Martin Bruce Jones of Ferrier Hodgson, Perth, as Administrators of GGO.
This action was necessitated by the written advice received from Yimuyn Manjerr (Investments) Pty Ltd (formerly Multiplex Resources Pty Ltd) (YMI) that it would not contribute its share of the Cash Call issued by GGO and due for payment on 5 July, 2000. GGO has also been formally advised that YMI have elected not to contribute any further funds required during the current Budget period, commencing 1 July and ending 31 December 2000.
The immediate affect of the above advice leaves GGO, as Operator of YMJV approx $3.9 million short in available funds. Accordingly, GGO is unable to sustain operational activity at the YMJV mine site.
The company announces that diamond drilling has commenced at the Iron Princess Anomaly in the Middleback Ranges in South Australia. The Middleback Ranges Project is one of the Helix Resources NL - BHP Minerals Strategic Exploration Alliance projects.
The diamond drill hole has been designed to investigate a previously untested large coincident magnetic and gravity anomaly located at approximately 300 to 400 metres depth below the old Iron Princess iron ore workings.
This highly significant coincident geophysical feature, which is some 600 metres in diameter, shows many similar geophysical and surface geochemical characteristics to large copper-gold-iron deposits identified throughout the world. Analyses of previous shallow drilling, to 250m depth, for iron ore by BHP has indicated substantial copper and gold anomalism in the overlying weathered rocks. The combination of geochemistry and geophysics has made the Princess Anomaly a high priority target in Helix's ongoing exploration of the Gawler Craton.
The drillhole will take 3 to 4 weeks to complete to an estimated depth of approximately 600 metres.
An insurance claim arising from the March 1996 partial collapse at Pasminco's Elura mine in New South Wales has been settled for $25 million.
After adjusting for amounts already paid on the claim and a $1 million deductible, the amount payable to Pasminco is $22.95 million. The settlement will have a positive impact, after allowing for prior year provisions, of $16.5 million before tax in the 1999/2000 financial year.
No one was injured in the collapse which occurred when a crown pillar failed creating a collapse zone running through the top section of the mine to the surface. A section of the mine was rendered unworkable, some infrastructure was lost and production at the time was disrupted for several months.
Sydney Gas Company NL announces that it has started planning for a new coal bed methane project to be located in the Upper Hunter Valley areas of the Sydney Basin which are within the Petroleum Exploration Licences 4 and 267 held by the group.
BERKLEY PETROLEUM CORP:
JOINT NEWS RELEASE UPDATE ON EAST LOST HILLS GAS DISCOVERY
Berkley is pleased to provide the following update on the East Lost Hills natural gas discovery.
The production test of the Berkley No 1 discovery well has been completed and analyzed. As previously reported, the initial perforated interval of 272 feet in the well was flow tested at an extended, restricted flow rate of 13.1 million cubic feet per day (mmcfpd) of natural gas. The pressure build-up portion of the production test has now been interpreted. The data obtained from this build-up is very encouraging and supports the partnership plan to tie the well in and proceed with the expanded development drilling plan. Flowing bottom hole pressure during the test was 14,438 psi, liquids were easily transported by the gas. The gas rate, the water gas ratio, and condensate gas ratios were stable for the final 48 hours of the flow test. Berkley No 1 has demonstrated the presence of a significant hydrocarbon column in excess of 2750 feet at East Lost Hills, as well as a high pressure, high quality reservoir with enormous deliverability.
A subsequent press release of June 22, 2000 by the EKHO participants advised the following:
TRI-VALLEY'S EKHO NO 1 ENCOUNTERS HIGH-GRADE PETROLEUM
The operator and partners of the EKHO No 1 deep test well 45 miles northwest of Bakersfield are announcing petroleum of magnificent quality as results of the initial phase of production testing come in.
The oil is pure and sweet with an API gravity of 48.6 degrees, and the associated natural gas has a net Btu content of 1,460 with no water, H2S, C02 or nitrogen, according to Joe Kandle, president of Tri-Valley Oil and Gas Co. (OTCBB: TRIL - news), EKHO No 1 operator.
Bronzewing Belt Project - RC Drilling Programme
The company has received final results from the recent RC drilling programme. The programme consisted of 41 holes for a total of 2311.5m. The holes were drilled in a wide variety of areas to test several targets generated by previous exploration of the project area. The assaying was by fire assay on individual 1 metre samples.
Several significant (greater than 3.5g/t Au over two metres) results were obtained from the drilling programme, these are given in the following table.
Significant results from RC drilling programme.
| PROSPECT | HOLE | NORTH | EAST | DEPTH | FROM | TO | M | AU G/T |
| Forked Stick | BRC029 | 7975 | 4300 | 35 | 17 | 24 | 7 | 11.44 |
| Including | 20 | 22 | 2 | 27.60 | ||||
| Eric | BRC037 | 5900 | 5180 | 89 | 46 | 48 | 2 | 3.75 |
| International | BRC043 | 7050 | 4425 | 59 | 51 | 53 | 2 | 4.15 |
SIGNIFICANCE OF THESE RESULTS
Previously within this project only two zones of potentially economic resources were known. The recent programme has added three new targets in areas well away from the known resources. Additional exploration will be carried out to better define these new areas.
Cue Exploration Pty Ltd (Cue), a wholly owned subsidiary Of Cue Energy Resources No Liability has accepted an offer from Apache Northwest Pty Ltd (Apache) to acquire the whole of Cue's participating 17.65% interest in EP363.
Under the terms of the offer which is effective July 1, 2000, Apache will pay all ongoing costs associated with the Cue equity and in return will grant Cue an option to acquire a 10% interest in every production licence derived from EP363.
The option may be exercised any time after Apache has recovered, from the sale of petroleum from each licence, an amount equal to twice Apache's payments, on behalf of the option interest.
The Apache offer is subject to the pre-emptive rights of EP363 coventurers.
Current participants in EP363 are:
Apache Northwest Pty Ltd 45.45% (Operator)
Cue Exploration Pty Ltd 17.65%
Australian Worldwide Exploration NL 16.00%
Kufpec Australia Pty Ltd 12.79%
Tap (Harriet) Pty Ltd 8.11%
MIKESKA-HAMILL FIELD PROSPECT, AUSTIN COUNTY, TEXAS
Location building is complete and a land rig has been mobilized to commence an 8,650 foot test of the Mikeska-Hamill Field Oil Prospect. The well is due to spud today and is expected to have a duration of around 20 days.
Fletcher Challenge Energy has acquired 124,800 gross acres in the Saskatchewan District as part of a programme to improve the quality of its portfolio in Canada. Of that, 38,400 acres are undeveloped. Fletcher Challenge Energy's working interest in the lands is approximately 85%, which brings the net acreage (developed and undeveloped) to 106,000 acres.
The properties were purchased from UPRI for C$23.25 million, and are located in the North of the Saskatchewan District. Included are five developed areas with infrastructure complementary to assets already owned and operated by Fletcher Challenge Energy in the area.
Current gas production is approximately five million cubic feet per day and 250 barrels of oil per day. Extensive seismic survey information came with the purchase as well as 37,000 net acres of undeveloped land.
Coburn Mineral Sand Project Drilling Programme
Drilling commenced today to test for major heavy mineral sand deposits south of Shark Bay in Western Australia.
This programme is being guided by the results of digital photogrammetric mapping from high resolution colour aerial photography recently flown over the area. Computer processed images of this data have confirmed several wind blown sand dune sets which are transected by a series of NNE trending sub parallel linear features up to 15 kilometres in length. These previously unknown gently arcuate linear features are spaced several kilometres apart and are interpreted to be fossil shorelines beneath the sand dunes.
Drilling to test for high grade beach strand mineralisation will be focused along the western or seaward side of the fossil shorelines and the programme will also test for larger lower grade deposits within the overlying sand dunes.
Approximately 400 holes are planned, mainly along east-west traverses 2 kilometres apart. The average hole depth is expected to be 25 metres and drilling should be completed in late August.
The production test of the Berkley No 1 discovery well has been completed and analyzed. As previously reported, the initial perforated interval of 272 feet in the well was flow tested at an extended, restricted flow rate of 13.1 million cubic feet per day (mmcfpd) of natural gas. The pressure build-up portion of the production test has now been interpreted. The data obtained from this build-up is very encouraging and supports the partnership plan to tie the well in and proceed with the expanded development drilling plan. Flowing bottom hole pressure during the test was 14,438 psi, liquids were easily transported by the gas. The gas rate, the water gas ratio, and condensate gas ratios were stable for the final 48 hours of the flow fest. Berkley No 1 has demonstrated the presence of a significant hydrocarbon column in excess of 2750 feet at East Lost Hills, as well as high pressure, high quality reservoir with enormous deliverability.
After reviewing the Independent engineering analysis, the partnership estimates the Berkley No 1 well to be draining 190 billion cubic feet (bcf) of natural gas and probably in excess of 260 bcf for the 4600 feet examined laterally by the test.
Xenolith has an indirect interest via its equity in Kookaburra Resources Ltd and KOB Energy Inc.
The first results from the underground drilling program being conducted from the Swan decline were positive and have confirmed the repetition of ribbons beneath the historic workings on the Sheepshead and Deborah lines of reef. The thesis that ribbons, which control gold mineralisation in Bendigo, repeat with depth beneath historic workings, is central to the Company's announced 10 million-ounce gold potential of the New Bendigo.
The first results from the underground drilling program being conducted from the Swan decline were positive and have confirmed the repetition of ribbons beneath the historic workings on the Sheepshead and Deborah lines of reef. The thesis that ribbons, which control gold mineralisation in Bendigo, repeat with depth beneath historic workings, is central to the Company's announced 10 million-ounce gold potential of the New Bendigo.
Matrix, an amalgam of Murchison United and Majestic Resources has recently raised $7 million and is now looked in for listing next week. The Company has a three year view of production of 20,000 tonnes from its present 5500 tonnes.
Mosaic Oil NL has commenced a testing program on the Taylor Oilfield in conjunction with Schlumberger Oilfield Services. Special down-hole logging tools are being used to identify oil and gas zones with a view of re-perforating existing oil production zones and perforating new oil bearing intervals previously untested.
Molopo Australia NL announce that the Mongolian courts have ordered the restoration of the license over the Tsagaan Suvraga copper resource project located in Mongolia, that has been subject to a title dispute.
The courts decision, however, may be subject to an appeal.
The Tsagaan Suvraga copper deposit is a major porphyry copper deposit with an indicated resource of 240 million tonnes at 0.53% copper with a cap of approximately 10 million tonnes of copper oxide resource at a similar grade. The deposit represents the second largest known copper deposit in Mongolia, with the largest deposit being the resource for the Erdenet copper mine.
Oil Company of Australia Limited on behalf of the PL 44 Joint Venture advises that:
Merivale No.9, an oil appraisal well situated approximately 220 metres north-north-west of Merivale No.2, latitude 25 deg. 33 min. 03.00 sec. south, longitude 148 deg. 20 min. 00.04 sec. east, was spudded at 19:00 hours on June 24, 2000. Surface casing was set at 205.8 metres R.T. intermediate casing was set at 1439 metres R.T.. At 06:00 hours Thursday the well was about to commence air drilling at a depth of 1451 metres R.T.. Progress for the week was 335 metres.
The primary targets of the well are the staircase sandstone and the reids dome beds.
SANTOS LIMITED - SUMMARY OF DRILLING
WEEK ENDING 6TH JULY 2000
QUEENSLAND
WELL: Challum 18DW1
TYPE: SWQ Unit Gas Development
LOCATION: PL 59, Aquitaine B Block, 1.25km NE Challum 1 and 20km W of the Ballera Gas Centre
STATUS AT 06/07/2000 0600 HOURS: Preparing to complete well as a gas producer from the Permian Toolachee Formation. The upper lateral objective was abandoned due to mechanical difficulties. Challum 18DW1 reached a total measured depth of 2902m.
Challum 18 was designed as a high angle well with two sub-horizontal lateral well bores designed to drain separate reservoirs in the Permian age Toolachee Formation. Challum DW1 is designated the lower lateral wellbore while Challum DW2 is designated the upper lateral wellbore.
PLANNED TOTAL DEPTH: DW1 3121m MD
DW2 3100m MD
WELL: Merivale 9
TYPE: Gas Development
LOCATION: PL 44, Dennison Trough, 0.2km NNW of Merivale 2, 0.5km N of Merivale 8, and some 140km N of the township of Roma.
STATUS AT 06/07/2000 0600 HOURS: Preparing to commence air drilling. Current depth is 1451m, with 351m progress for the week.
PLANNED TOTAL DEPTH: 2107m
OFFSHORE WESTERN AUSTRALIA
WELL: Triller 1
TYPE: Exploration Wildcat
LOCATION: TL 3, Offshore West Coast Barrow Island, WA
STATUS AT 06/07/2000 0600 HOURS: Laying out bottom hole assembly prior to running abandonment plugs. Triller 1 reached a total depth of 1526m, with 1024m progress for the week.
PLANNED TOTAL DEPTH: 1552m
SANTOS LIMITED - SUMMARY OF DRILLING
WEEK ENDING 6TH JULY 2000
SOUTH AUSTRALIA
WELL: Moomba 116
TYPE: Gas Development
LOCATION: PPL 7, Moomba Block, 1.6km W of Moomba 91, 1.0km SW of Moomba 113, and some 9km NW of the Moomba Gas Plant.
STATUS AT 06/07/2000 0600 HOURS: Drilling ahead. Current depth is 2704m, with 1785m progress for the week.
PLANNED TOTAL DEPTH: 2789m
WELL: Pondrinie 17DW1
TYPE: Gas Development
LOCATION: PPL 90, Merrimelia-Innamincka Block, 1km WNW of Pondrinie 15DW, 1.8km WSW of Pondrinie 8 and 75km NE of the Moomba Gas Plant.
STATUS AT 06/07/2000 0600 HOURS: Preparing to complete well as a gas producer. The well reached a total depth of 2602m MD with 275m progress for the week.
Pondrinie 17DW is a high angle gas development well designed to drain gas reserves in the Permian aged Toolachee and Tirrawarra/Merrimelia Formations.
PLANNED TOTAL DEPTH: 2820m
QUEENSLAND
WELL: Stokes 7
TYPE: Gas Development
LOCATION: PL 84, Total 66 Block, 1.3km NE of Stokes 6,1.7km E of Stokes 4, and some 130km SW of the Ballera Gas Centre.
STATUS AT 06/07/2000 0600 HOURS: Drilling ahead. Current depth and progress for the week is 2042m. The well spudded on 29/06/2000.
PLANNED TOTAL DEPTH: 2591m
SANTOS LIMITED - SUMMARY OF DRILLING
WEEK ENDING 6TH JULY 2000
USA
WELL: Webb 1
TYPE: Gas Exploration
LOCATION: Suemaur Moore Prospect, San Patricio County, Texas
STATUS AT 05/07/2000 0600 HOURS: Preparing to drill ahead after setting a 178mm liner at 3200m. Progress for the week is 318m.
PLANNED TOTAL DEPTH: 4115m
WELL: State Tract 157#1
TYPE: Gas Exploration
LOCATION: South Long Reef Prospect, Aransas County, Texas.
STATUS AT 05/07/2000 0600 HOURS: Drilling ahead at 3169m with 353m progress for the week.
PLANNED TOTAL DEPTH: 3048m
WELL: Mew Estate 1
TYPE: Gas Exploration
LOCATION: Edge-Queen City 111 Prospect, Duvual County, Texas
STATUS AT 05/07/2000 0600 HOURS: Conditioning hole prior to running production casing. The well reached a total depth of 2698m, with 869m progress for the week.
PLANNED TOTAL DEPTH: 2743m
Sydney Gas Company advises that its wholly owned subsidiary Sydney Gas Operations Pty Ltd lodged an application with the NSW Department of Mineral Resources for an Assessment Lease within PEL 2 in the Sydney Basin.
The Assessment Lease applied for covers an area of 48 square kilometres south-west of Camden including the area where the Johndilo Pilot Project is located and seeks an initial term of 6 years. Under its application SGO has sought approval from the DMR to deliver gas to the AGL Gas Networks distribution system at Menangle Road, Camden pursuant to SGO's Gas Supply Agreement with AGL Wholesale Gas Ltd dated 12 August 1999.
WMC Limited announces that its wholly owned subsidiary, WMC Resources Ltd, has found further encouraging gold intersections at the Belleisle discovery at its St Ives Gold operation in Western Australia. The two best intersections were 43.1 metres at 18.41 grams a tonne, starting at a depth of 216.9 metres, and 38.2 metres at 8.25 grams a tonne, starting at a depth of 277.5 metres.
Drilling continues on the prospect, which is on Lake Lefroy about 12 kilometres north of the St Ives processing plant and 7 kilometres from the heap leach facility now being built.
Fletcher Challenge
Drilling & Production Testing Report
For the week ending 05/07/2000
Country : Canada
Block Area: Baldwinton
Well Name : A6-10-44-23 W3M
Objective : A Development well testing Sparky Oil
Current Status : * Spud: 25/06/2000
* Cased for Sparky Oil
* Rig Released: 27/06/2000
Block Area: Baldwinton
Well Name : A11-10-44-23 W3M
Objective : A Development well testing Sparky Oil
Current Status : * Spud: 27/06/2000
* Cased for Sparky Oil
* Rig Released: 29/06/2000
Block Area: Baldwinton
Well Name : A12-10-44-23 W3M
Objective : A Development well testing Sparky Oil
Current Status : * Spud: 25/06/2000
* Cased for Sparky Oil
* Rig Released: 29/06/2000
Block Area: St Albert
Well Name : 10-35-53-26 W4M
Objective : A Development well testing Viking/Basal Belly
River Gas
Current Status : * Spud: 23/06/2000
* Cased for Basal Belly River gas
* Rig Released: 29/06/2000
Block Area: Mikwan
Well Name : 5-28-37-23 W4M
Objective : An Exploratory well testing Basal Belly River Gas
Current Status : * Spud: 04/07/2000
* Prepare to drill out. Very wet conditions
Block Area: Baldwinton
Well Name : A14-10-44-23 W3M
Objective : A Development well testing Sparky Oil
Current Status : * Spud: 29/06/2000
* Cased for Sparky Oil
* Rig Released: 02/07/2000
Block Area: Baldwinton
Well Name : A13-10-44-23 W3M
Objective : A Development well testing Sparky Oil
Current Status : * Spud: 02/07/2000
* Ran production casing
Fletcher Challenge
Drilling & Production Testing Report
For the week ending 05/07/2000
Country : New Zealand
Block Area: PML 38036
Well Name : McKee-2B
Objective : Sidetrack development infill well in the McKee oil reservoir
Current Status : * Milled window in 9(5/8") casing at 1618-1625m, Required additional milling in order to get directional assembly through window
* Drilled 8(1/2") directional hole 1625-2212mAH.
Encountered McKee formation 2210mAH, 23m shallow to prognosis
Block Area: PML381012
Well Name : MB-7
Objective : Horizontal development well in the Maui B D1.10 oil reservoir
Current Status : * Drilled 8(1/2") hole from 3393m to 3455m at inclination of 82 degrees.
* Ran and cemented 7" liner
* Performed rig maintenance while operations
suspended for 3 days due high winds and sea state
preventing offloading of equipment
* Current operation @ 0600hrs 6th July, waiting on
equipment to drill 6" horizontal hole in reservoir
Block Area: PML381012
Well Name : MB-6
Objective : Horizontal development well in the Maui B D1.10 oil reservoir
Current Status : * Suspended well with stuck 4(1/2") liner pending evaluation of side-track or completion options while operations proceed on MB-7
Country : Brunei
Block Area: Block CD
Well Name : EEG-(1)
Objective : Stacked Pliocene Shelf Sand objectives 3400-4600m
Current Status : * Drilled to 2679m
* Ran Pex-DSI wireline log
* Run 13(3/8") casing
* Drilled to 3290m
In the quarter ended 30 June 2000, the QCT Resources Limited Group's coal shipments totalled 3,815,000 tonnes. This total comprised 2,647,000 tonnes from its share of the Central Queensland Coal Associates and Gregory joint venture mines and1,168,000 tonnes from the South Blackwater mines.
FOURTH QUARTER HIGHLIGHTS
* Oil discovery at Puffin-5; Puffin-5 suspended as a potential producer.
* Announcement of planned Puffin-6 appraisal well.
* Puffin Oilfield has potential to contain 55 million barrels recoverable.
* Phillips has secured rig slot for Coleraine-1 for August or September 2000.
* New 150 million barrel prospect, Aristarchus added to prospect inventory in AC/P28.
* 1 for 5 non-renounceable entitlements issue announced to raise $2.6 million to be fully underwritten by CIBC World Markets.
AGL announce that AGL had moved to 100% ownership of Chilean company Gas Valpo. Gas Valpo is the leading natural gas distributor in Region V, the area around Valparaso, the seat of Government in Chile.
The first three drill holes of a seven-hole program designed to confirm an identified nickel sulphide resource at the North Avebury Prospect west of Zeehan have been completed.
In addition to encouraging confirmatory intersections in the North Avebury deposit, one hole (A018) also intersected high grade mineralisation in the Central Avebury deposit.
The Company is highly encouraged by the results which further confirm that the Avebury Prospect is not a single nickel sulphide deposit but rather a cluster of significant deposits. It should be emphasised that the present drilling program is confined to 300 - 400 m of strike length within the prospective geological horizons which run for approximately 1800 - 2000 m.
KIMBERLEY SECURES LICENCE TO MINE NAMAQUALAND DIAMONDS GRANTED LICENCE IN WORLD-CLASS COASTAL DIAMOND PROVINCE
Kimberley is gearing up for a major work program which could lead to large-scale mining operations as early as next year at its Namakwa Diamond Project in South Africa's Western Cape Province after being granted the tenement licence for the rich coastal diamond project.
Western Australian miner Robe River Iron Associates established a series of new performance benchmarks in June to cap off a record year.
In the 12 months to 30 June 2000 Robe shipped 31,379,855 tonnes, 863.797 tonnes more than in any other comparable period in its history.
This included a significant increase in the higher value lump product which Robe now manufactures from ore which was once only regarded as a source of sinter fines.
The Pilbara producer, which is majority owned and managed by North Limited, also reached new highs in every area of its operations from total material mined at its massive Mesa J deposit through to fines and lump product produced by its port operations at Cape Lambert.
Details of records (wet metric tonnes):
| 1999-2000 | PREVIOUS RECORD | |
| * Total material mined | 57,392,332 | 42,097,034 (1998-99) |
| * Ore hauled/railed | 30,985,032 | 30,133,970 (1997-98) |
| * Ore produced | 31,197,297 | 30,185,344 (1997-98) |
| * Total ore shipped | 31,379,855 | 30,516,058 (1997-98) |
| * Lump shipped | 4,523,168 | 2,488,500 (1997-98) |
Every weekly production record was broken in the week to 25 June, including 1,292,033 tonnes of total movement on Mesa J; 720,096 tonnes hauled, railed and crushed; and 748,750 tonnes produced by the Cape Lambert plant.
Tap Oil N.L. provides the following update on the Olive-1 exploration well which spudded on 29 June 2000.
LOCATION
The well is located in TL/1, 12 kilometres northeast of Varanus Island and 5 kilometres northwest from the Gipsy oil development at latitude 20(deg)36' 35.26"S and longitude 115(deg)40' 50.35"E.
PROGRESS
As at 6.00am today, the well has drilled ahead to a total depth of 2,232 metres measured depth.
Unfortunately, the well failed to encounter a hydrocarbon accumulation and will now be plugged and abandoned as a dry hole.
The Company advises that a large compressor motor in the refrigeration unit of the Ammonia Plant, at
the Phosphate Hill fertilizer complex, has developed a fault and will delay fertilizer production.
The motor is in the process of being repaired in Mount Isa.
It is expected that ammonia production rates will return to normal and fertilizer production will resume within a month.
The Phosphate Hill fertilizer complex is expected to achieve an averageproduction rate of 70,000 tonnes once production recommences.
International Annax Ventures reports that the third diamond drill hole, SOP24D, of the current program has also intersected high grade zinc-lead-silver stratiform mineralisation at the Dairi project located in North Sumatra. High grade intersections were previously reported for holes SOPD 22 and 23.
Hole SOP24D intersected the main SEDEX zone at 64.8m down-hole depth and approximately 80m up-dip from SOPD23D (14.5m @15.9% Zn, 9% Pb and 8.6 g/t Ag). All intercepts are down-hole widths which approximate true thickness. A 4m upper zone of mineralisation was also intersected at 48m depth. Assays are tabled below.
| Metal Grades |
||||||
| Drill Hole |
Interval (metres) |
Intercept (metres) |
% Zinc |
% Lead |
g/t Silver |
Combined % Lead + Zinc |
| SOP24D |
64.8-75.0 |
10.2 |
17.0 |
12.2 |
19.1 |
29.2 |
| and |
||||||
| 48.0-52.0 |
4.0 |
8.2 |
5.1 |
7.7 |
13.3 |
|
Oil stocks have been largely overlooked in the last twelve months and are now attracting more market support. Oil however, has been at a nine year high for the last year and looks poised to remain well above US$20 per barrel in the medium term.
A case in point is our company which is now enjoying a very strong revenue stream from its oil production in the USA of approximately US$500,000 per month (A$835,000). A conservatively geared balance sheet, combined with cash at bank, will enable the company to make a US$6 million acquisition.
Centennial Coal Company Limited announce that the Company has agreed to purchase the remaining 50% interest in Springvale Colliery from GC Coal Company.
Lake Goongarrie Joint Venture
Further encouraging Drilling Result reported from Chameleon
An additional Reverse Circulation ("RC") drilling programme has recently been completed on the Chameleon Prospect situated in the southern part of the area covered by the Lake Goongarrie Joint Venture in which Dalrymple holds a 40% interest and WMC Resources Limited 60%.
Assay results from an RC hole, GG390 drilled on section 6663040N at Chameleon returned an intersection of 22 metres @ 5.4 g/t gold from 150 metres down hole depth. The hole was drilled at an angle of -60 degrees oriented to AMG84 -51 grid east. An estimated true width for this intersection is about 17 metres.
This RC hole was drilled 200 metres to the south-southeast from gold mineralisation previously reported in holes GG68 ( 34 metres @ 3.6 g/'t gold) and GG 382 (25 metres @ 3.9 g/t gold); these holes were estimated to have been drilled sub parallel to the mineralised structure. Holes GG380 and GG381 returned 5 metres @ 1.7 g/t gold and 2 metres @ 4.9 g/t gold.
Three other RC holes in the current programme drilled further to the south-southeast and north-northwest of the previous results failed to return any significant assays.
Diamond hole GG389 drilled to undercut RC holes GG 380 and GG 381 has been completed but not yet assayed. A plan is attached showing the approximate location of recent RC and Rotary Air Blast (RAB) drillholes.
Mining at Normandy's Bronzewing mine cannot recommence until formal approval is received from the Department of Minerals and Energy and the Coroner, who are currently investigating last week's tragic incident. At this stage, there has been no indication of when that might occur.
FOURTH QUARTER ACTIVITIES
HIGHLIGHTS
FOURTH QUARTER HIGHLIGHTS
CLEAR BRANCH FIELD, JACKSON PARISH, NORTH LOUISIANA
The Terry Ewing No 1 well is presently drilling ahead at 4,556 feet after running surface casing to 3,025 feet. The well is a 12,200 foot test of the Clear Branch Field Gas Prospect with an expected total duration of around 30 days.
The location lies on trend with significant Hosston and Cotton Valley production which blankets a portion of North Louisiana. Hunt Oil discovered the field in 1976 and has produced in excess of 55 billion cubic feet of gas from multiple Hosston reservoirs.
Importantly, all of the gas completions within the field were natural and no infill chilling or stimulation has been applied at Clear Branch. Engineering studies suggest significant amounts of producible gas could remain within the Hosston reservoirs and be captured by wells drilled on smaller spacing.
In addition the deeper Cotton Valley gives the prospect considerable upside with overall potential being in the 50 plus billion cubic foot range. The test well is designed to evaluate both objectives.
Up to five wells may be required to recover the field potential. Modern fracturing technology supports a case for flow rates exceeding 5 million cubic feet of gas per day. A pipeline lies adjacent to the test well location and spot gas is currently trading above US$4.00 per thousand cubic feet.
Goldfields Limited have announced that drilling into the northern end of the Mount Julia resource (Inferred Resource 731,000 tonnes at 7.6g/t gold) and the southern end of the Tyndall Zone at Goldfields' Henty Mine in Tasmania has confirmed and extended the presence of the large mineralised body.
Novus Petroleum Limited reports the following update with respect to its working interests in its portfolio of properties in the Western Desert, Egypt.
CRACOW JOINT VENTURE
ROYAL SHOOT MINERAL RESOURCE ESTIMATE
Sedimentary Holdings NL announces an Inferred Mineral Resource estimate for mineralisation contained within the Royal Shoot in the Klondyke epithermal vein system at Cracow.
The resource estimation of 1.1 million tonnes @ 11gAu/t for 390,000 in situ contained ounces of gold and 9.5gAg/t for 350,000 in situ contained ounces of silver, was received from Newcrest Mining Limited, the joint venture manager.
The mineral resource is reported above a cut-off of 4.6 metrelgAu/t. The zone from which the resource estimate has been made is located between local grid 4450mN and 4900mN (see attached long projection), and is based on results from 93 core holes and 7 reverse circulation percussion holes.
As yet no resource estimate has been made on the zone of mineralisation beneath the old Klondyke workings, north of 4900mN.
The Directors announce the successful fracture stimulation (fraccing) of the Rodney Creek #7 well. The well was logged and showed good cement bonding and was perforated with 6 shots per foot across the lower and middle Betts Creek coals in preparation for stimulation. Halliburton setup their rig and fracture stimulated the interval with Delta Frac Cross-linked Gel(TM) and 80,000 pounds of sand.
Rodney Creek #3 well was re-worked and put on pump on 29th June 2000 to supply water for the fraccing operation on the other 4 holes. The well is producing water and gas from the Betts Creek and Aramac coals. Gas flows are not being measured at the present time however we are encouraged by the fact of there being a gas flow at this early stage of dewatering.
The drilling phase of the trial development work has been a complete success. All holes were drilled without any technical problems and logging has shown that the coals were of the expected thickness and intersected at the predicted depths.
The second phase of development has commenced successfully. Hydraulic fraccing was started on June 30th and should take three weeks to complete. With the completion of the fraccing on each well dewatering will commence using high yield progressive cavity pumps.
Dioro Exploration NL advise the first results received from 4 diamond holes drilled in the current exploration program at the Frog's Leg project. Frog's Leg is owned 49% by Dioro Exploration NL and 51% by Mines and Resources Australia Pty Ltd (a wholly owned subsidiary of the Cogemma Group).
| Hole No | Co-ordinates | Dip Azimuth | Depth | Interval | Intersection | ||
| Northing | Easting | (m) | (m) | (g/t Au) | |||
| MEDD001 | 6595669 | 334174 | -60 070 | 132 | 11-14 3m @ 0.877 | ||
| 16-26 10m @ 1.66 | |||||||
| 28-30 2m @ 2.34 | |||||||
| 40-45 5m @ 34.02 | |||||||
| Inc 42-43 1m @ 152.02 | |||||||
| 47-48 1m @ 0.97 | |||||||
| 60-61 1m @ 0.60 | |||||||
| 71-73 2m @ 1.42 | |||||||
| 84-85 1m @ 2.07 | |||||||
| 116-117 1m @ 1.66 | |||||||
| 121-123 2m @ 1.26 | |||||||
| MEAC109D | 6595575 | 334102 | -60 090 | 220 | 124-134 10m @ 2.06 | ||
| 151-153 2m @ 0.68 | |||||||
| 160-167 7m @ 1.03 | |||||||
| 179-183 4m @ 12.17 | |||||||
| Inc 180-181 1m @ 37.05 | |||||||
| 190-191 1m @ 4.00 | |||||||
| 195-196 1m @ 0.61 | |||||||
| MEAC213D | 6595816 | 333988 | -60 070 | 119 | 98-99 1m @ 0.61 | ||
| 103-104 1m @ 0.70 | |||||||
| MEAC215D | 6595800 | 333948 | 60 070 | 152 | 94-96 2m @ 3.09 | ||
| 98-100 2m @ 3.58 | |||||||
| 117-120 3m @ 10.06 | |||||||
| 126-142 l6m @ 4.59 | |||||||
| Inc 133-140 7m @ 8.80 | |||||||
The current program comprises 10,200 metres of drilling and involves 4 rigs on site drilling reverse circulation and diamond holes. One rig is conducting a program of 1,000 metres of diamond drilling below the 600 metres of strike extent beneath the lake at Frog's Leg. Hole MEAC215D is approximately 40 metres into the lake.
The Board of Directors announce that Kingsgate has purchased from Ban Pu Public Company Limited, (Ban Pu), the outstanding 10% of the shares of Akara Mining Ltd, the entity which owns 100% of the Chatree Gold Project.
The consideration for the purchase is the issue to Ban Pu of 560,000 fully paid shares at A$0.75 per share in Kingsgate and the extinguishment of amounts owing by Ban Pu to Akara.
This agreement replaces all other agreements between Ban Pu and Kingsgate.
Nido Petroleum has announced that the Monde/Nido joint venture has withdrawn from Zhongyuan Rehabilitation project in Central China.
In April, Nido and its US based partner, Monde, accepted an offer from two companies to join the project and fund the ongoing development. The agreement was subject to the two parties obtaining finance, which was expected to be a formality. However, Monde and Nido have just been advised that the funding has been rejected.
The nature of the project does not allow for the project to be suspended effectively while new funding is obtained. As such, the joint venture decided to withdraw from the project and avoid further work and expenditure, despite the economic merit of the project.
Nido's attention in the near term will focus on its Philippine exploration interests.
2,000 TONNES OF MATERIAL TO BE EXTRACTED TO DETERMINE OPTIMUM MINING PROGRAM FOR THE SOUTH AUSTRALIAN MAGNESIUM PROJECT.
Pima Mining NL has announced that its 80% owned subsidiary SAMAG Limited is undertaking trial mining at its Mount Hutton Magnesite deposit to determine the optimum mining program for its proposed South Australian Magnesium Project.
The Mount Hutton mine, located 25 kilometres north west of Leigh Creek and 17 kilometres west of the Telford Rail siding, contains a measured resource of 18 million tonnes grading 42.9% MgO (23.66%Mg). It will be the first deposit to supply magnesite ore to the proposed 52,500 tonnes pa magnesium and metal alloy plant to be located near Port Pirie, South Australia.
The extended maintenance shutdown of the Company's Bulong operation, which commenced on 15 May 2000, has been completed and recommissioning commenced on 29 June 2000. All defects leading to the prolonged shutdown have been successfully rectified and tested at operating temperature and pressure. The length of time required for the shut has impacted on nickel output and constricted working capital. The Company announces that Barclays Bank has provided support for the operation by approving a further working capital facility and initial draw down has been affected.
The shutdown has permitted all semiannual maintenance tasks to be completed as well as modification and improvements to be undertaken to enhance plant performance. In particular a number of modifications have been implemented to improve the management of gypsum precipitated in the nickel solvent extraction circuit, thus improving throughput and utilisation and availability.
The plant was brought back up to operating temperature and pressure with minimal disruption to the planned schedule and feed pump rates to the autoclave have settled at design levels. The refinery sections of the plant will be progressively brought back on line over the next few days.
Petroz advises that it has sold its interests in two UK North Sea exploration blocks to Denerco Oil A/S for A$340,000.
Blocks 28/15 and 29/11, in which Petroz held a 15% interest, were acquired in the 18th Gazettal Round in December 1998 and were the only exploration licences held by Petroz in the UK.
The blocks were considered to be non-core assets, the sale of which will result in a reduction in Petroz' future exploration commitments and a refocussing of the Company's activities in the Australasian region.
Proceeds from the sale will be applied to the development of Petroz' key asset - the Bayu-Undan Project located in the Timor Gap Zone of Co-operation.
BHP has announced that it has signed a 'Memorandum of Understanding' (MOU) with the NSW government aimed at facilitating the transfer of ownership of various BHP properties in Newcastle to the State.
The properties covered by the MOU are the 150ha former Newcastle Steelworks Main Site including the marine precinct earmarked for the development of a multi-purpose shipping terminal, the Kooragang Island land totalling 230ha, the Belmont Sands 500ha land holding and 1500ha of land at West Wallsend.
BHP has announced it has signed a Risk Service Contract (RSC) with the Algerian national oil company, Sonatrach, for the development of four gas/condensate reservoirs in the Ohanet region of Algeria.
The Ohanet development represents a large, relatively stable earnings and cash flow generator within the BHP portfolio and marks a major step for the Company in establishing a core business in Algeria. It also provides an important balance to other projects ensuring downside protection to low oil price environments.
Equinox, Billiton Sweden Resources BV and Billiton Exploration Australia Pty Ltd announce that they have restructured the alliance to explore jointly for Iron Oxide Copper-Gold deposits in Sweden, which was announced on 26 April 2000. The restructure ensures that the value of the alliance remains with Equinox and Billiton, rather than being diluted through a new vehicle, thus maximising the benefit of existing shareholders,
The principle components of the agreement include:
(1) Billiton has subscribed for 10,000,000 shares in Equinox at A$0.15 per share, raising A$1,500,000 for Equinox.
(2) Equinox has committed to spend A$1,500,000 on exploration of the Company's Norrbotten Project in Sweden before 30 June, 2001 ("the Option Date").
(3) Billiton has an option exercisable by the Option Date to form a joint venture on the Norrbotten Project.
* Billiton may earn a 50% interest in the Norrbotten Project by spending US$2.0 million on exploration of the Project within 2 years of the Option Date.
* Billiton may elect to earn a further 20% interest (aggregate 70%) in the Norrbotten Project, within an additional 3 year period by either completing a feasibility study or expending an additional US$10.0 million on the Project.
* Equinox will manage the Norrbotten Project work programme during both the period up to the Option Date and the Billiton earning phases.
(4) Billiton and Equinox are negotiating an extension of the alliance between the companies to the exploration of Billiton's Mumbwa Project in Zambia and to potential elsewhere in the world for Iron Oxide Copper-Gold mineralisation.
Marlborough Resources NL note the increase in the Company's share price on Friday, 30 June, and are not aware of any specific reason that led to this increase.
However, the Directors advise that the Ardlethan Tin Project is progressing well. Specific progress is as follows:
* Increased ore resources are being defined by the latest 85 hole drilling programme on the Yithan alluvial tin lead. These drilling results are now being evaluated in detail by the Company' s consultants and it is anticipated that there will be an upgrading in the quantity of resource, quality of reserves and average grade. Extensions of the resource have been defined to the east, north and below the existing ore body.
* The pilot plant test work is showing good results in confirming the suitability of equipment selected for the alluvial project. Exact test results will be obtained progressively during July. The separation of ore from clay and volume of water required were both very encouraging.
* Competitive quotations have been received from Asian smelters to treat the tin concentrate to be produced at Ardlethan. Test work has shown the Ardlethan concentrate should contain high grade tin and low impurities, properties which are attractive to the Asian smelters.
* Detailed study of the records of the Ardlethan tin mine, which Marlborough has purchased from Western Metals, shows that buildings, plant, equipment, power lines and other infrastructure will be of considerable benefit as a base for developing the new project.
* The purchase also included the tailings where the grade was proved by a 50 hole drilling programme. The total tin remaining in the tailings is estimated at about 14,000 tonnes, which is about double the quantity of tin contained in the Yithan alluvial tin lead.
* Negotiations are proceeding with bankers and other groups who are interested in participating in development of the new Ardlethan project which will probably be performed in three major phases:-
- mining of the high grade alluvial deposits next year, at a rate of 500,000 cubic metres of ore per year and capital cost of $4 million;
- doubling capacity of the alluvial operations as water and other services are arranged; and
- treatment of tailings with the latest technology equipment to achieve higher levels of recovery and profitability.
* A draft Environmental Impact Statement has been lodged and well received by the various Government authorities and the local community at Ardlethan. The final EIS will be lodged in July.
* Tin price in Australian dollar terms has strengthened since the Feasibility Study was developed in December.
In conclusion, work on the new project is proceeding well and further results will be announced during July.
Agreements in principle have been reached whereby Billiton Exploration Australia Pty Ltd may farm in to over 3,700km2 of ground in the Mt Woods area of South Australia believed highly prospective for Olympic Dam style Cu-Au deposits.
GASFLOW AT EAST GLEN
Production Licence 16, Surat Basin Qld - Mosaic Oil 100%.
EAST GLEN (LAST FLOWED IN 1994):
East Glen has been re-entered and downhole junk has been successfully retrieved. Testing was conducted over a one week period ending Sunday 2nd July. After clean-up, the well flowed at a stabilised rate of 2 million cubic ft/day through a 18/64 inch choke with a surface flowing pressure of 1,350 pounds per square inch.
Drillsearch advised that its 56%-owned Canadian subsidiary, Circumpacific Energy Corporation, has reported that the 4,500 metre Devonian gas well in which it is participating is anticipated to commence drilling on or about 15th July, 2000.
The well is designated as Lambert 5-4-52-22 W5M. It is located 160 km west of Edmonton, Alberta.
Minerals Corporation reported that its group company Queensland Kaolin Limited ("QKL") has completed the acquisition of the Skardon River Kaolin Project.
QKL has assembled a geological team comprising leading International Kaolin experts to assist in the development of the Skardon River Kaolin resource. Following our earlier data review, a new drilling programme will commence in August to complement earlier drilling programmes which will provide a high degree of confidence in the resource definition. Product evaluation testwork will be undertaken in September.
The Kaolin Pilot plant situated in Cairns will be moved to Skardon River in July and testwork throughput capacity will be upgraded to accommodate the above programme. Kaolin production is scheduled for commencement at the end of this year.
As a result of re-negotiation between the parties, NHG will now acquire 100% of Kambalda West and associated Joint Venture Interests as follows: Pilbailey 85.5% and Merougil 75%.
As disclosed previously, this project is located approximately l0km west of Kambalda and 30km from the company's milling facility at Jubilee. The project area is highly prospective for gold with resources already established at Jonah Dam (14,250 ounces) which adjoins WMC's Cave Rocks deposit.
The payment terms are as follows:
Payment on settlement: $ 500,000
Production based additional payments:
Upon the production of 250,000 ounces
or 2,500,000 dry tonnes of ore: $500,000
Upon the production of a total of 500,000 ounces
or 5,000,000 dry tonnes of ore: $1,000,000
The Prime Minister of the Independent State of Papua New Guinea, Sir Mekere Morauta announced that the National Executive Council (Cabinet) had approved in principal the MDC for the 33,000 tonne per annum Ramu Nickel Project located near Madang in PNG (the "Project"). Orogen Minerals Limited ("Orogen") currently owns 31.5% of the Project equity.
The National Executive Council has also advised the Head of State to execute the MDC and grant a Special Mining Lease ("SML") for the Project.
The Olive-1 exploration well spudded at 7.00pm hours on 29 June 2000.
The well is located in TL/1, 12 kilometres northeast of Varanus Island and 5 kilometres northwest from the Harriet Gipsy oil development at latitude 20 deg 36'35.26"S and longitude 115 deg 40'50.35"E.
As at 6.00am today, the well has drilled ahead to 610 metres measured depth and will continue to drill ahead to the planned total depth of 2,232 meters measured depth. Estimated drilling time is 5 days.
The Company announces the results of ongoing drilling at its Cibaliung Gold Project in West Java, Indonesia. The Company announced in November 1999, an Inferred Resource for the Cikoneng & Cibitung shoots of 993,000 tonnes @ 9.78 g/t Au & 57.5 g/t Ag containing 312,230 ounces of gold and 1.83 million ounces of silver.
The objective of the drilling programme for this year is to expand the inferred resource, convert part of that inferred resource to indicated status and test for new vein systems and extensions within the tenement. It is planned to drill between 8,000 and 10,000 metres this year.
| HOLE | VEIN | INTERCEPTS |
DOWNHOLE |
ASSAY RESULTS | CORE | |
| FROM | TO | LENGTH | AU | AG | RECOVERY | |
| (m) | (m) | (m) | (g/t) | (g/t) | ||
| Cikoneng | ||||||
| AC-4 | 231.20 | 238.60 | 7.40 | 6.71 | 43 | 93.2% |
| 251.70 | 253.80 | 2.10 | 34.04 | 228 | 90.5% | |
| AC-5* | 200.55 | 206.50 | 5.95 | 1.61 | 18 | 94.1% |
| Cibitung | ||||||
| AC-6 | 122.40 | 123.35 | 0.95 | 19.10 | 133 | 100.0% |
| 130.40 | 133.50 | 3.10 | 6.35 | 42 | 96.8% | |
* Note: Results reported to 3g/t Au cut-off except AC-5 (1g/t Au cut-off).
We refer to an announcement made on the 1st February 2000 and advise that after further discussion with New Hampton Goldfields Limited (NHG), Central Kalgoorlie Gold Mines Limited (CKG) has agreed to sell 100% of its interests in the Kambalda West Project to NHG.
As previously announced, the Eureka mine has been affected by a number of adverse factors related to the deterioration of Zimbabwe's economy, particularly shortages and escalating prices of diesel fuel and other imported goods. In addition, Zimbabwe's exchange rate has not depreciated in line with inflation differentials. One of the direct consequences of this is the receipt of a very low Zimbabwe dollar gold price, in relation to the purchasing power of the Zimbabwe dollar with respect to imported goods necessary for gold production. Almost all equipment, consumables and spares for Eureka are imported.
Zimbabwe's economy has yet to improve and the Eureka mine is incurring unacceptable losses. Delta Gold will suspend mining at Eureka, with the existing mining contractor's equipment being demobilised on 30 June 2000.
Ore currently on the heap leach pads will continue to produce gold for several months. The operation will be placed on care and maintenance and the site will continue to be managed in accordance with Delta's environmental policies.
Eureka was forecast to contribute less than 5% of production and profit to Delta in the current financial year, but will now make a loss. The shortfall in production from Eureka will be more than made up by better than forecast production from Delta Gold's Australian operations.
DRILLING UPDATE TO JUNE 28, 2000
International Annax Ventures Inc. (IAX) has announced the results for drill hole SOP23D, the second diamond drill hole of the current program at the Sopokomil stratiform zinc-lead-silver Dairi prospect located in North Sumatra.
Hole SOP23D interesected a 14.5 metre thick zone of massive sulphide approximately 150 metres down-dip of the surface trace of the mineralized zone. Hole SOP23D reported the following assays:
| Metal Grades |
||||||
| Drill Hole |
Interval |
Intercept |
% Zinc |
% Lead |
g/t Silver |
Combined % Lead + Zinc |
| SOP23D |
107.0 - 121.5 m and |
14.5 |
15.9 |
9.0 |
8.6 |
24.9 |
| 104.0 - 107.0 m |
3.0 |
2.6 |
1.5 |
3.2 |
4.1 |
|
Hole SOP23D is located 100 metres north of the section on which holes SOP18D and SOP22D were previously drilled and results reported. Hole 18D intersected 16.9 metres grading 18.8% zinc and 12.4% lead. Hole 22D intersected 19.1 metres grading 16% zinc and 7.5% lead and a second interval grading 29% zinc and 22.2% lead over 2.7 metres.
Highlands Pacific Limited advises that the Papua New Guinean Government has approved the Mining Development Contract (MDC) for the Ramu nickel project located in the Madang Province.
ONSHORE UK
KEDDINGTON-2 (ROC 100%)
The Keddington-2 well was completed on 22nd June. A pumping unit and rods will now be installed and the well hooked into the production system. Pumping production, from the same Basal Westphalian reservoir sands as Keddington-1, is expected to start on about 20th July.
SALTFLEETBY-5 (ROC 100%)
The Explorer drilling rig, owned by Roc Oil (UK) Limited, is currently moving to the Saltfleetby 'B' Site, where it is scheduled to spud the Saltfleetby-5 well on 7th July. Saltfleetby-5 will be drilled to a planned total depth of 3,065 metres, with a horizontal section of more than 300 metres. The expected well duration is 80 days, including testing and completion.
Saltfleetby-5 has a primary target in Namurian sands, which are deeper than the Westphalian sands currently contributing all the field's gas production of 50 mmscf/day.
If successful in the Namurian, this well will add to field reserves and deliverability, otherwise it will be completed shallower, as a fifth Westphalian producer, to provide additional production flexibility and the potential to accelerate production.
OFFSHORE UK
KYLE (ROC 12.5%)
As of Wednesday 28 June 2000 (UK Time) production from the extended well test on the Kyle 29/2c-12z well continued at approximately 13,000 barrels of oil per day with no water production and a stable gas/oil ratio.
MONGOLIA (ROC 100%)
On 28 June 2000 Roc Oil (Mongolia) Ltd (a wholly owned subsidiary of Roc Oil Company Limited) completed the delivery of approximately 7,600 bbls of crude oil to China under its crude oil sales contract with Sinochem International. It is planned to sell approximately 30,000 barrels of oil during June and July under this contract.
The crude oil being sold under this contract is priced in USD at international oil prices.
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