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January 30, 2017

Tomingley Gold Operations (TGO) 

Continued wet weather during the quarter further impacted production by delaying ore releases across all pits (263.4mm vs long term average 112.6mm). However the operation still generated a net operating cash flow after development costs of $4.8 million.

With dry weather returning, the mining fleet and pits are performing well and ore from the higher grade Caloma Two pit should be available for processing shortly.

Changes to the mine schedules show an expected H2 of 31,000 – 36,000 ounces at an AISC of A$1,350 – A$1,550. Revised full year guidance for FY2017 production is now 53,000 – 58,000 ounces at an AISC of A$1,600 – A$1,750.

Quarter Results

  • Gold production was below plan at 11,756 ounces
  • Site operating cash costs were significantly impacted by production at A$1,597/ounce with all in sustaining costs (AISC) of A$1,803/ounce
  • Gold sales 12,519 ounces for revenue of A$20.9 million at an average price of A$1,666/ounce
  • Gold forward contracts at 31 December 2016 of 43,000 ounces at average forward price of A$1,715/ounce.

Significant drill intercepts were recorded by core and RC drilling in the Caloma and Wyoming One deposits as part of the underground mining study.

Dubbo Project (DP)

At the end of 2016 the name of the project holding company Australian Zirconia Limited (AZL) was changed to Australian Strategic Materials Ltd (ASM) to reflect the broader product output. The project name has similarly been modified to Dubbo Project (DP).

Alister MacDonald has been appointed General Manager – Marketing to advance the DP through its development program.

MOU for product offtake and supply of process equipment with Siemens Ltd advised in a separate ASX release on 25 October 2016.

A modularisation study was completed that showed significant improvements in the capital cost and execution strategy for the Dubbo Project, as advised in a separate ASX release on 28 October 2016. Upfront capital has been internally reviewed at US$480M including contingency for first stage of production.

Corporate

The Group’s cash position totalled A$24.5M with A$20.4M in cash and bullion on hand valued at A$4.1M, a decrease of A$3.8M from the previous quarter.

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