FOCUS MINERALS LIMITED: ACTIVITIES REPORT FOR THE QUARTER ENDED JUNE 30, 2011
- Made takeover offer for 100% of Crescent Gold Limited, which will enable Focus to become a Top 5 Australian gold producer
- Completed circa $40 million equity raising to accelerate key production and exploration programs
- Met production guidance, producing 18,102oz of gold
- Drilling confirmed discovery of new gold camp at the Company’s 100% owned Treasure Island Gold Project
- Achieved significant development and operating milestones, including commencing ore production at new Tindals Mining Centre Open Pit operations and stoping at The Mount
- Delivered strong production from established Tindals Mining Centre underground operations – 160,056t @ 3.17g/t for 16,315oz
- Accelerated exploration program in-line with plans to have eight rigs operating by the start of the September Quarter
- Sales revenue of A$26.2 million from gold sales of 18,443oz at an average price of A$1,419/oz
- Strong balance sheet with total cash and equivalents of $32.7 million
Focus Minerals Ltd (ASX: FML), an Australian gold producer, delivered a number of major operational milestones during the June Quarter, including opening a second new mining operation and commencing a significant exploration program across four key project areas, whilst meeting its production guidance, producing 18,102oz of gold for the Quarter.
At the end of the June Quarter, the Company entered into a Bid Implementation Agreement with Crescent Gold to make a takeover offer for 100% of Crescent’s shares in a transaction that will make Focus one of Australia’s Top 5 gold producers with outstanding growth potential across two major Western Australian mining regions. This transaction has been progressing well, and Focus has now received acceptances totalling 45.77%.
At the start of the Quarter, Focus completed a $39.3 million equity raising to accelerate its key production and exploration programs.
Operationally, significant achievements during the Quarter included:
- The opening of the Tindals Mining Centre Open Pit operations, Focus’ second new mining operation this year. This saw the first ore being processed from the Empress Open Pit (17,000t @ 1.67g/t) and commencement of ore development at the Dreadnought Open Pit. Approvals were also received at the end of the month to commence development at Big Blow, the third pit at the Open Pit operations;
- Commencement of long-hole stoping at The Mount. This saw Focus produce a total of 21,469t @ 2.81g/t for the Quarter from The Mount underground operation, which Focus opened in the March 2011 Quarter; and
- A record 160,056t @ 3.17g/t of ore mined from the Company’s established Tindals Mining Centre Underground operations.
On the exploration front, Focus has accelerated its exploration program in-line with plans to have eight rigs operating by the start of the September Quarter. This has seen the commencement of exploration at two target areas in the Greater Coolgardie region – the Norris Project Area and the Three Mile Hill Project Area – plus the expansion of drilling at the Tindals Mining Centre and The Mount.
Importantly, Focus’ inaugural drilling program at the Treasure Island Gold Project at Lake Cowan has confirmed that high-grade mineralised veins continue at depth confirming the discovery of a new gold camp. This marks the start of an exciting exploration phase for Focus.
The results over 1km of strike have delivered exceptionally high-grade intercepts with new and existing mineralised veins appearing to be open in all directions, and Focus is now stepping out from the first holes and looking at other prospects across the lake with the mobilisation of a lake aircore rig that has commenced a +10,000 metre program along a 6km strike of favourable geology.
Focus achieved sales revenue of A$26.2 million from gold sales of 18,443oz at an average price of A$1,419/oz and delivered cash costs at A$981/oz. Cash costs are slightly higher than the average of A$870 achieved in the previous two Quarters, as they include the impact of operational ramp-ups, higher than usual mine development costs, and a mill reline.
Focus closed the Quarter with a strong balance sheet with total cash and equivalents of $32.7m.