FOCUS MINERALS LIMITED: ACTIVITIES REPORT FOR THE QUARTER ENDED MARCH 31, 2011
HIGHLIGHTS
- On schedule to grow production to 100,000ozpa in calendar 2011 and 130,000ozpa in calendar 2012, enabling the Company to capitalise on high gold prices
- Second operating centre, The Mount underground mine, commenced ore production during the Quarter
- Focus’ third operating centre, the Tindals Open Pits, progressed rapidly and set to start production in June Quarter
- Delivered a global resource growth of 10%. Now 26.5Mt @ 2.6g/t for 2.3Moz
- Global reserves and stocks at 3.5Mt @ 2.2g/t for 247,000oz
- Acquisition of 100% of Treasure Island Gold Project at Lake Cowan with option to acquire a further 110km2 tenement
- Commenced preliminary 20-hole orientation drilling program at Treasure Island
- Maintained cash costs at A$878/oz
- Produced 18,391oz of gold with 286,251 tonnes processed at 2.14g/t through Three Mile Hill plant
- Sales revenue of A$27.5 million from gold sales of 19,942oz at an average price of A$1378/oz
- Total cash and equivalents of $8.6 million at March 31, 2011
Focus Minerals Limited (ASX: FML) is pleased to report that it has had a highly successful March Quarter which has set up the Company to expand production to 130,000oz by 2012.
Significant achievements during the Quarter included the start of mining at Focus’ second production centre, The Mount, located 85km south of the Company’s Coolgardie operations in Western Australia. Focus has a target of 1,500 ounces per vertical metre from The Mount with extraction of 40 vertical metres a year to support annualised production of 40,000 to 60,000 ounces.
At the same time, substantial progress was made in the push to develop a third production centre, the Tindals Mining Centre Open Pits at Coolgardie. Development of these pits is now underway, with production set to start in the June Quarter. They are forecast to contribute an additional 30,000 ounces a year to Focus’ overall production.
Along with Focus’ existing Tindals underground mines, these new developments are expected to see Focus increase production to 100,000 ounces in calendar 2011 and to 130,000 ounces in 2012.
The growth strategy is being accelerated to ensure that Focus can take full advantage of the current high gold price. To help achieve this, Focus completed a circa $40m equity raising subsequent to the end of the Quarter, with heavy institutional demand reflecting strong support for the Company’s plan and growth outlook.
In parallel to the strong focus on new mine development, exploration and development work continued at the Tindals Mining Centre with an overall increase in resources of 20 per cent across both the Underground operations and Open Pits. This has seen Focus’ Global resource figure grow 10 per cent to 26.5Mt @ 2.6g/t for 2.3M ounces. Global reserves are 3.5Mt @ 2.2g/t for 247,000 ounces.
Mine development at the Tindals Mining Centre underground operation continued at a steady rate during the Quarter with on-target production of 132,382 tonnes at an average grade of 3.37g/t Au.
Despite a foreshadowed five-day shutdown, 286,251 tonnes of ore was processed through the Three Mile Hill plant with 18,391 ounces of gold produced at a steady cash operating cost of A$878/oz.
Importantly, Focus also commenced a preliminary 20-hole orientation drilling program at the Treasure Island Gold Project at Lake Cowan in WA which is expected to yield its first results in May.
During the Quarter, Focus agreed to acquire the remaining 25 per cent of the Treasure Island Gold Project, giving it 100 per cent ownership of the highly prospective tenement. It was also granted an option to acquire an adjoining tenement totalling some 110km2 immediately to the east.
Capital investment and exploration expenditure for the Quarter totalled $8.6 million, comprising $3 million of mine capital development and $5.6 million of exploration expenditure. This included $3.7 million relating to The Mount development. At the end of the Quarter cash and bullion held by Focus totalled $8.61 million.