Allied Gold Limited
ASX : ALD
AIM : AGLD
TSX : ALG

Allied Gold Limited

March 10, 2010 09:29 ET

Allied Gold Limited: Gold Ridge Mining Limited Contract Awarded Project Commencement Imminent

TORONTO, ONTARIO--(Marketwire - March 10, 2010) -

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Allied Gold (TSX:ALG)(ASX:ALD)(AIM:AGLD) has entered into a Letter Of Intent to award the Engineering, Procurement and Construction (EPC) Contract for the refurbishment and additional capacity expansion of the Gold Ridge project in the Solomon Islands to GR Engineering Services Pty Ltd (GRES) whose key personnel (as JR Engineering) initially engineered and constructed the project in 1998.

GRES have been integrally involved with Australian Solomons Gold Limited (ASG) in the feasibility studies relating to the project's redevelopment and expansion from the current 2Mtpa capacity to 2.5Mtpa. GRES will be responsible for the process and plant facilities, with the initial phase of the contract structured on cost-plus reimbursable terms to underpin an accelerated pre-development work approach. On completion of final delineation of work scopes and final review of associated costing which is well advanced, Allied Gold and GRES have agreed, subject to conditions, to convert the contract to a fixed cost delivery with a mechanism for cost overrun or underrun sharing. This will be completed by end of March 2010.

The anticipated cost to complete the EPC component of the redevelopment remains in line with budget estimates at approximately A$60M, including contingency of approximately A$5M.

Gold Ridge already has significant infrastructure in place and the focus of the refurbishment program will be initially centred on the rebuilding of the existing processing plant facility to expedite early gold production scheduled for the first quarter of 2011. 

Executive Chairman and CEO, Mark Caruso, stated, "The company recently engaged in high level meetings with senior Solomon Islands Government officials and the project continues to receive unequivocal support. Equally, land owners are eager to see the recommencement of mining and participate in the relocation process as soon as possible. "This project will have a material impact on the Solomon Islands economy and it will also send a message to the International investment community that the country is open and ready for business."

"The awarding of the EPC contract is a further indication that Allied Gold is accelerating the program for redevelopment, with further contracts scheduled to be negotiated and awarded over the coming month."

"The political will and the ground swell of support by all stakeholders towards the project within the Solomon Islands is strong, and the experience that Allied Gold brings to the project will ensure that Gold Ridge will be back in production by around calendar QTR 1 2011, with annual average gold production of 120,000ozs pa over the life of mine."

About Allied Gold: The Simberi gold mine (60km from Lihir Island) has produced 150,000 ounces since production commenced in February 2008. Production in 2010 is expected to be approximately 75,000-80,000 ounces, with an expansion later in the year to lift Simberi plant throughput from 2Mtpa to 3Mtpa and gold output towards 100,000 ozs p.a. The 100,000 ozs p.a Simberi Sulphide project feasibility study is expected during 2011. Allied Gold acquired the Gold Ridge project in the Solomon Islands in late 2009 and pre-development works are currently underway, with production of 120,000 ozs p.a expected in FY2012. The company's combined resource inventory now stands at in excess of 7.9 Million ounces of gold, underpinning its current and future increases in production.

Contact Information

  • Allied Gold Limited
    Mr Mark Caruso
    Executive Chairman
    08 9356 2776
    or
    Allied Gold Limited
    Mr Frank Terranova
    Chief Financial Officer
    07 3252 5911
    or
    Collins Street Media
    Mr Simon Jemison
    03 9224 5319