Troy Resources NL

Troy Resources NL

January 31, 2006 01:29 ET

Troy Enhances Reputation for Low Cost Gold Production and High Profits

WEST PERTH, WESTERN AUSTRALIA--(CCNMatthews - Jan. 31, 2006) - Troy Resources NL ("Troy") (ASX:TRY)(FWB:TRW) enhanced its reputation for being one of Australia's lowest cost and most profitable gold producers today when it announced its average cash cost was A$173 an ounce (US$127) in the December quarter.

The Company announced in its quarterly report to the Australian Stock Exchange that it had produced 42,654 ounces in the quarter at this cost - a 46% increase over its production in September quarter, which at A$180 an ounce at the time made Troy the lowest cost Australian gold producer.

"There is no doubt that we are in the right place at the right time and the exceptional first half performance has set the Company up for a very successful financial year. We believe that few companies are better placed in the Australian gold industry," said Executive Chairman, Mr. John Jones.

Troy's outstanding quarter and big lift in production came as the Company brought its Lord Henry and Lord Nelson mines at Sandstone in Western Australian into full production combined with another excellent quarter at its Sertao project in Brazil with the commencement of mining at the Xupé project in late November.

The Sandstone mill treated 121,997 tonnes of ore at 7.5g/t gold to produce 28,029 ounces of gold at a cash cost of A$164. The Brazilian mine (in which Troy has a 70% interest) treated 21,791 tonnes at 29.6g/t gold to produce 19,640 ounces at a cash cost of A$191.

Mr. Jones said that average cash cost of production of $173 per ounce would provide cash margins approaching $A600 an ounce on current spot gold prices.

He said that Troy's mining philosophy had always been about concentrating on profits by being a low cost gold producer.

He said that Troy has every confidence for the future because of its strong financial position with liquid assets of A$45.3 million and the quality of its exploration ground both in Australia and overseas for which it has an exploration budget of A$6 million for the current year.

Exploration drilling at Xupé during the quarter had continued to identify economic mineralisation down plunge from the current mining operation and Troy had also entered into a new exploration project in Brazil.

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