RNS Number:3420Q
Ballarat Goldfields N.L.
30 January 2007
Ballarat Goldfields NL
ASX and Media release: 30 January 2007
Quarterly Activities and Cash flow Report
For the 3 months ended 31 December 2006
SUMMARY
Corporate and Finance
* Proposed merger with Lihir Gold Ltd (LHG) via a scheme of arrangement
(Scheme) was announced on 17 October 2006 and Explanatory Statement released
to the ASX on 18 December 2006.
* The Directors unanimously recommend that, in absence of a superior
proposal, shareholders vote in favour of the merger.
* If approved, Ballarat Shareholders will own 5 shares in the new merged
Lihir entity, for every 54 BGF shares they owned.
* As part of the merger, BGF placed 149 million shares with LHG at $0.28
raising $41.7 million. These funds enabled BGF to commit to the new
development plan.
* Cash balance at 31 December 2006 was A$40.7 million
.Mine Development
* Performance to the revised development plan, implemented in the
September quarter, was slightly ahead of schedule with key depth and lateral
targets achieved during the quarter.
* Underground development of 989 metres continued the improved development
rates achieved in the previous quarter.
* Over 7,000 tonnes of low grade development material from a sill drive at
the base of the 218 Woah Hawp ore block was processed.
* Commitment made for construction of the In-Line Leach Reactor (stage 2
of the process plant).
* Water treatment options, previously focused on dewatering objectives,
are being reviewed to access the opportunity for supplementary supply to the
city of Ballarat.
Mine Geology and Exploration
* Drilling continues to confirm the geological model.
* Assay grades continue to support the existence of strong gold
mineralisation.
MERGER WITH LIHIR GOLD LIMITED
BGF and Lihir Gold Limited (Lihir) announced on 17 October 2006 a proposal to
merge the two companies via a scheme of arrangement (Scheme). Under the terms of
the Scheme, BGF will become a wholly owned subsidiary of Lihir with BGF
shareholders receiving 5 New Lihir Shares for every 54 BGF shares held, valuing
BGF at 28.8 cents per share (based on the LHG share price as at the date of the
announcement of the merger).
An Explanatory Statement was released to ASX and mailed to BGF shareholders on
10 January 2007 to provide them with relevant information necessary to determine
whether to vote in favour of the merger at the Scheme Meeting that will take
place on 12 February 2007 in Ballarat.
The Directors of Ballarat Goldfields unanimously recommend that, in the absence
of a superior proposal, BGF shareholders vote in favour of the proposed merger
as they believe it will deliver significant value to BGF shareholders. Ballarat
Goldfields Directors (all of whom hold BGF shares) intend to vote their shares,
and any proxies cast at their discretion, in favour of the merger.
The Explanatory Statement is also available on the BGF website at
www.ballarat-goldfields.com.au.
BALLARAT EAST PROJECT Development
Revised Development Strategy
As announced in early September 2006, BGF completed a comprehensive review of
its development strategy for the Ballarat East project. The outcome was a new
and substantially superior development plan, with emphasis on early access to
the deeper, higher grade Resources, deferring production until calendar year
2008.
Underground Development
Depth and lateral development objectives established under the revised
development plan, implemented in September, were achieved putting the
underground development slightly ahead of schedule.
Ballarat Goldfields - Decline Advance Summary
Woah Hawp Decline Sulieman Decline Prince Decline
(depth below surface) (depth below surface) (depth below surface)
Planned Actual Planned Actual Planned Actual
Dec-06 339 345 324 330 336 337
Development rates were sustained at the high rates achieved in the previous
quarter with a total of 989m developed for the December quarter. Ground
conditions have improved with depth and with work practices now reflecting
accumulated local knowledge the current development rates are expected to be
maintained, and improved upon, as increased heading availability further
improves equipment utilisation and productivity.
Dec Qtr 05 Mar Qtr 06 Jun Qtr 06 Sept Qtr 06 Dec Qtr 06
U/G
Development
(m) 546 584 691 976 989
Ore Tonnes 6,737 6,519 3,993 4,100 7,345
The development focus remains on the Sulieman, Woah Hawp and the recently
commenced Prince declines. The Sulieman decline initially provides a platform
for underground diamond drilling and in the future will become the main return
airway for the mine. The Woah Hawp decline is being driven to provide access to
Resources in the central and northern areas of the mine and the Prince decline
will provide access to deeper high grade Resources in the southern part of the
mine.
As the Resources are accessed it is planned that they will be fully delineated
by drilling, developed and then brought into production.
Development continued within the 218 Woah Hawp ore block during the quarter with
a sill drive pushed to the geological boundary of the structure, and extensive
mapping undertaken to better define the ore zones before production drilling
commenced in late December.
An underground ventilation circuit was commissioned in the first week of January
to support the development of the Prince decline system.
BGF is re-evaluating the nature and timing of major elements of the ventilation
circuit for Ballarat East including ventilation options at South Prince and
Golden Point as a consequence of the improved underground development rates.
A second underground dewatering pump installation was commissioned in the first
week of January that will allow access to the 176 Sulieman trial stoping area
over the coming months.
Processing Plant
The High Pressure Grinding Roll trials have been completed and results are being
analysed in order to determine the best option to meet future expanded
production rates.
Approximately 7,000 tonnes of low grade development material was processed
during the December quarter as part of the trials, and to enable further fine
tuning of the process plant. Approximately 500 tonnes of sulphide concentrate
was produced, which has been added to the previous stockpiled material in
readiness for the stage 2 leach circuit. Approximately 4kg of gold was recovered
to dore with the balance of the gold reporting to the sulphide concentrate.
Gekko Systems were engaged to commence construction of stage 2 of the processing
plant, the concentrate leaching circuit (In-Line Leach Reactor) that will
commence treating gold bearing sulphide concentrates later in 2007.
MINE GEOLOGY AND EXPLORATION
Exploration drilling
During the December quarter drilling was focused on shallow resources close to
the planned Woah Hawp decline, followed by deeper drilling (to 700m below the
surface) targeted towards the Blue Whale fault. The drilling results continue to
identify gold mineralisation in the locations defined by the geological model,
with visible gold and higher grade assay results observed in quartz veins close
to the Blue Whale fault.
Significant assay results from the December 2006 quarter are summarised in the
following Table:
Hole number Down hole depth (m) Width (m)* Grade g/t Location
BEU145 289 to 293 4.0 5.2 Tiger Fault
---------- --------------- --------- -------- -------------
BEU145B 334 to 339 5.0 4.2 Mako Fault
---------- --------------- --------- -------- -------------
354 to 356 2.0 10.7 MakoFW fault
---------- --------------- --------- -------- -------------
BEU158B 371 to 375 4.0 3.7 Whale Shark Fault
---------- --------------- --------- -------- -------------
(NB*All of the intersections reported have been adjusted for their estimated
true widths.)
ENVIRONMENT AND COMMUNITY
In maintaining continual improvement of amenity and environmental aspects, BGF
ensures progressive and continual land rehabilitation is achieved. A major
replanting program was successfully completed during the quarter, despite lower
than average rainfall.
Maintaining a high level of community support and regulatory compliance is a key
focus and was successfully achieved during the quarter with no significant
environmental breaches or incidents. A high level of pro-active community
dialogue was maintained with blast vibration being the main point for
discussion.
A contract has been awarded to construct a water treatment facility at the
historic Llanberris shaft site. The treatment plant will enable BGF to
recommence dewatering the northern part of the Ballarat East field in 2007. BGF
is pursuing water re-use opportunities within the Ballarat community.
CORPORATE AND FINANCE
Finance
The cash balance at 31 December 2006 was $40.7 million.
As part of the proposed merger, BGF placed 149 million ordinary shares with
Lihir at $0.28 raising $41.7 million on 17 October 2006.
BACKGROUND INFORMATION
Ballarat East Project Summary
Situated in one of the most famous historical gold mining regions of Australia,
Ballarat produced over 12 million ounces before it's premature closure, around
the time of the first world war.
In 2004, for the first time following discovery in the 1850's, the leases over
the entire Ballarat field were consolidated under the sole ownership of BGF.
This has resulted in the company constructing a comprehensive geological model
of the entire field, demonstrating what many had suspected, that Ballarat had
massive unexplored prospectivity.
Following a prefeasibility study, based on BGF's geological model, underground
development at Ballarat East recommenced in December 2004. The plan, proposed an
initial underground mine at Ballarat East, with twin access declines servicing
the haulage and ventilation.
This plan has now been modified, as increased knowledge has led to increased
resources and a better understanding of the likely distribution of high grade
gold within the system. Drilling has continued to increase confidence in the
geological model. Development of the mine and associated process plant is
continuing, with stage 1 of the process plant now commissioned.
BGF's geological model robust
BGF's geological model remains robust as the drilling continues to intersect
gold mineralisation in the target zones identified by the geological model.
After probability adjustment for risk and uncertainty the company derived an
Exploration Potential of 8.3 million ounces, with 90% confidence limits ranging
from 3.3 million ounces to 15.7 million ounces in addition to a Total resource
of 1.4 million ounces, including 0.24 million ounces of indicated resource, for
Ballarat East. (Further information is available on the BGF website
www.ballarat-goldfields.com.au)
Note: The information in this report that relates to Exploration Results,
Mineral Resources and Exploration Potential is based on information compiled by
Mr Steven Olsen. Mr Olsen is an employee of Ballarat Goldfields NL, is a member
of the Australian Institute of Mining and Metallurgy and is a Competent Person
under the definition of the 2004 JORC Code. The Exploration Potential described
above is conceptual in nature, and there is insufficient information to
establish whether further exploration will result in the determination of a
Mineral Resource. Mr Olsen consents to the publication of this information in
the form and context in which it appears. . The terms Exploration Results,
Mineral Resources and Exploration Potential are used in accordance with their
definitions in the 2004 JORC Code, which is available at www.jorc.org.
CORPORATE DIRECTORY
Registered and Principal Office Directors Chairman
10 Woolshed Gully Drive Alister Maitland Managing Director
Mt Clear Victoria 3350 Richard Laufmann Non-executive
Director
Australia Mike Etheridge Director of
Operations
Wojciech Ozga
Web Site Company Secretary
www.ballarat-goldfields.com.au Amber Rivamonte
Shareholder Services Stock Exchange Listing
Computershare Investor Services Pty Australian Stock Exchange Code BGF
Limited
GPO Box 2975EE Alternative Investment Market (AIM)
BGF
Melbourne AIM Nominated Advisor
Victoria 3000 RFC Corporate Finance Ltd
Australia Level 14, 19-31 Pitt St
Investor Enquires Tel: 1300 850 505 Sydney, NSW, Australia 2000
Tel: 03 9415 5000 AIM Nominated Broker
Fax: 03 9473 2500 Numis Securities
www.computershare.com Cheapside House, 138 Cheapside
London EC2V 6LH, United Kingdom
For further information: please visit the company website
(www.ballarat-goldfields.com.au)
Or contact Joel Forwood, Manager Corporate and Markets, on (03) 5327 1111.
Rule 5.3
Appendix 5B
Mining exploration entity quarterly report
Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.
Name of entity
BALLARAT GOLDFIELDS NL
ABN Quarter ended ("current quarter")
------------------- ------------------
50 006 245 441 December 2006
------------------- ------------------
Consolidated statement of cash flows
------------ ------------
Cash flows related to operating activities Current quarter Year to date
$A'000 (12 months)
$A'000
------------ ------------
1.1 Receipts from product sales and related - -
debtors
1.2 Payments for (a) exploration and (12,137) (22,135)
evaluation
(b) development - -
(c) production - -
(d) administration (995) (2,131)
1.3 Dividends received - -
1.4 Interest and other items of a similar 494 788
nature received
1.5 Interest and other costs of finance paid (98) (298)
1.6 Income taxes paid - -
1.7 Other (provide details if material) - -
------------ ------------
Net Operating Cash Flows (12,736) (23,776)
------ -------------------------- ------------ ------------
Cash flows related to investing
activities
1.8 Payment for purchases of: (a)prospects (1,952) (3,942)
(b)equity investments
(c) other fixed assets
1.9 Proceeds from sale of: (a)prospects 1 16
(b)equity investments
(c)other fixed assets
1.10 Loans to other entities
1.11 Loans repaid by other entities
1.12 Other (provide details if material)
------------ ------------
Net investing cash flows (1,951) (3,926)
------------ ------------
1.13 Total operating and investing cash flows (14,687) (27,702)
(carried forward)
------ -------------------------- ------------ ------------
1.13 Total operating and investing cash flows (14,687) (27,702)
(brought forward)
------ -------------------------- ------------ ------------
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, 41,720 42,411
etc.
1.15 Proceeds from sale of forfeited shares
1.16 Proceeds from borrowings
1.17 Repayment of borrowings
1.18 Dividends paid
1.19 Other (provide details if material)
------------ ------------
Net financing cash flows 41,720 42,411
------ ---------------------- ------------ ------------
Net increase (decrease) in cash held 27,033 14,708
1.20 Cash at beginning of quarter/year to date 13,642 25,967
1.21 Exchange rate adjustments to item 1.20
------------ ------------
1.22 Cash at end of quarter 40,675 40,675
------ ---------------------- ------------ ------------
Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the related
entities
-------------
Current quarter
$A'000
-------------
1.23 Aggregate amount of payments to the parties included in 224
item 1.2 -------------
1.24 Aggregate amount of loans to the parties included in -
item 1.10
------ -------------------------------- -------------
1.25 Explanation necessary for an understanding of the transactions
-------------------------------------------
Item 1.23 includes salaries, director fees and superannuation paid to
directors during the quarter.
-------------------------------------------
Non-cash financing and investing activities
2.1 Details of financing and investing transactions which have had a material
effect on consolidated assets and liabilities but did not involve cash
flows
--------------------------------------------
N/A
--------------------------------------------
2.2 Details of outlays made by other entities to establish or increase their
share in projects in which the reporting entity has an interest
--------------------------------------------
N/A
--------------------------------------------
Financing facilities available
Add notes as necessary for an understanding of the position.
------------- -------------
Amount available Amount used
$A'000 $A'000
------------- -------------
3.1 Loan facilities - -
------------- -------------
3.2 Credit standby arrangements - -
----- ----------------------- ------------- -------------
Estimated cash outflows for next quarter
$A'000
------------------
4.1 Exploration and evaluation 12,000
------------------
4.2 Development -
----- ----------------------------- ------------------
Total 12,000
----- ----------------------------- ------------------
Reconciliation of cash
------------------------- ------------ -------------
Reconciliation of cash at the end of the quarter Current Previous
(as shown in the consolidated statement of cash quarter quarter
flows) to the related items in the accounts is as
follows.
$A'000 $A'000
------------------------- ------------ -------------
5.1 Cash on hand and at bank 40,675 13,642
------------ -------------
5.2 Deposits at call
------------ -------------
5.3 Bank overdraft
------------ -------------
5.4 Other (provide details)
----- ---------------------- ------------ -------------
Total: cash at end of quarter (item 1.22) 40,675 13,642
----- ---------------------- ------------ -------------
Changes in interests in mining tenements
-------- --------------- -------- --------
Tenement Nature of Interest at Interest
reference interest beginning of at end of
quarter quarter
(note (2))
-------- --------------- -------- --------
6.1 Interests in mining
tenements
relinquished, reduced
or lapsed -------- --------------- -------- --------
6.2 Interests in mining
tenements acquired or
increased
-------- --------------- -------- --------
Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion rights
together with prices and dates.
Total number Number quoted Issue price Amount paid
per security up per
(see note 3) security
(cents) (see note 3)
(cents)
------ ---------- ---------- ---------- ----------- -----------
7.1 Preference
+securities
(description)
------ ---------- ---------- ---------- ----------- -----------
7.2 Changes
during
quarter
(a) Increases
through
issues
(b) Decreases
through
returns of
capital,
buy-backs,
redemptions
------ ---------- ---------- ---------- ----------- -----------
7.3 +Ordinary 1,347,653,935 1,347,653,935
securities
---------- ---------- ----------- -----------
7.4 Changes 149,000,000 149,000,000 28.0 28.0
during
quarter
(a) Increases
through
issues
(b) Decreases
through
returns of
capital,
buy-backs
------ ---------- ---------- ---------- ----------- -----------
7.5 +Convertible
debt
securities
(description)
---------- ---------- ----------- -----------
7.6 Changes
during
quarter
(a) Increases
through
issues
(b) Decreases
through
securities
matured,
converted
------ ---------- ---------- ---------- ----------- -----------
7.7 Options 8,000,000 Exercise Expiry date
(description price
and
conversion
factor)
1,500,000 One third 30/9/2007
each at: 12
cents; 13
cents; 15
cents
respectively
3,750,000 17.25 cents 30/9/2007
1,500,000 15 cents 2/12/2007
2,300,000 25 cents 30/9/2008
20.5 cents 30/09/2011
---------- ---------- ----------- -----------
7.8 Issued during
quarter
---------- ---------- ----------- -----------
7.9 Exercised
during
quarter
---------- ---------- ----------- -----------
7.10 Expired
during
quarter
------ ---------- ---------- ---------- ----------- -----------
7.11 Debentures
(totals only)
------ ---------- ---------- ----------
7.12 Unsecured
notes (totals
only)
---------- ----------
Compliance statement
1 This statement has been prepared under accounting policies which comply with
accounting standards as defined in the Corporations Act or other standards
acceptable to ASX (see note 4).
2 This statement does give a true and fair view of the matters disclosed.
Sign here:
Managing Director
Richard Laufmann
Date: 30 January 2007
Notes
1 The quarterly report provides a basis for informing the market how the
entity's activities have been financed for the past quarter and the effect on
its cash position. An entity wanting to disclose additional information is
encouraged to do so, in a note or notes attached to this report.
2 The "Nature of interest" (items 6.1 and 6.2) includes options in respect of
interests in mining tenements acquired, exercised or lapsed during the reporting
period. If the entity is involved in a joint venture agreement and there are
conditions precedent which will change its percentage interest in a mining
tenement, it should disclose the change of percentage interest and conditions
precedent in the list required for items 6.1 and 6.2.
3 Issued and quoted securities The issue price and amount paid up is not
required in items 7.1 and 7.3 for fully paid securities.
4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive
Industries and AASB 1026: Statement of Cash Flows apply to this report.
5 Accounting Standards ASX will accept, for example, the use of International
Accounting Standards for foreign entities. If the standards used do not address
a topic, the Australian standard on that topic (if any) must be complied with.
== == == == ==
This information is provided by RNS
The company news service from the London Stock Exchange
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