Troy Resources NL
ASX : TRY
TSX : TRY

Troy Resources NL

February 28, 2011 09:00 ET

Troy Half Year Ended December 31, 2010 Financial Results

PERTH, WESTERN AUSTRALIA--(Marketwire - Feb. 28, 2011) - Troy Resources NL ("Troy") (TSX:TRY)(ASX:TRY) -

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HIGHLIGHTS

  • Troy announced a profit of A$6.05m for the first half of FY2011, this compares to a loss of A$5.5m in the corresponding period last year.
  • Gold production for the half was 28,316 ounces compared to 34,182 ounces in the corresponding period last year.
  • Revenues from ordinary activities up 30% to A$38.8m.
  • Exploration expenditure of A$2.5m during the half-year period was fully expensed.
  • During the half the Company poured first gold at its Casposo gold project. The mine has completed commissioning but still ramping up to full production.
  • Subsequent to the half year end Troy signed an Amending Agreement with Investec Bank (Australia) Limited to increase its debt facility by A$10m to A$35m. The funds are primarily targeted at funding the Casposo project through the ramp up in production.

Troy Resources NL ("Troy") today announced a profit of A$6.05m for the half year ended December 31, 2010. This result compares to a loss of A$5.5m in the previous corresponding period.

Gold production for the half year was 28,316 ounces compared to 34,182 ounces in the corresponding period last year. Sales for the period were 28,322 ounces (2009: 25,490) generating total revenue of A$38.8m (2009: A$29.8m).

The result was achieved after allowing A$2.5m for exploration expenditure (2009: A$3.7m) and A$9.3m for amortisation and depreciation (2009: A$6.6m). It is important to note that Troy has an aggressive exploration program aimed at increasing Reserves and Resources and nearly all of this exploration expenditure is expensed.

The Casposo gold and silver project is continuing to ramp up production and we expect to steadily increase throughput.

Currently, the areas that restrict higher and continuous treatment rates are the filtering operations in the tailings (waste) filtering unit and the Merrill Crowe precious metals recovery unit. The flowsheet for the Casposo plant is different and more complex than most gold operations because it produces dry tailings after running the waste stream over two large vacuum belt filters.

The decision to use dry tailings was made in the pre-feasibility trade-off studies completed in 2007, before Troy acquired the project, which concluded dry tailings disposal was the most appropriate for the project due to the high level of seismic activity in the Argentinean Andes. Permitting for the plant was obtained on the basis of using dry tailings.

The Casposo ore bodies have typical levels of clay for this style of low sulphidation epithermal mineralisation. To date we have seen that although the clay content is not particularly high, variability in the types and amount of clay restricts flow rates through the tailing filters. This eventually requires the remainder of the plant to be shut down while the excess stocks are processed.

The type of clays encountered has necessitated a change of flocculent being used and resulted in a more difficult process to achieve the desired clarity in the feed for the Merrill Crowe section.

We have clearly identified plans to remedy these restrictions to enable us to run the facility at budgeted levels. In the short term we will be using higher aperture filter cloth, antiscalant to assist in cleaning the filters and reassigning duties across already installed filtering capacity. We will make a number of modifications to the filters in the Merrill Crowe section to better handle variations in feed rate and liquor quality. Although these changes will not require significant capital expenditure, they will take time to complete and optimise. We are also looking to acquire additional tailings filter capacity. We now expect to reach full production in the June quarter.

Mining at Casposo has continued to focus on the high grade Kamila pit. During initial commissioning we treated lower grade material. Now that commissioning is complete and we are focused on optimising the plant performance, we will start to process higher grade (plus 8g/t Au_eq) ore.

Commenting on the results Troy CEO Paul Benson said; "Obviously it is pleasing for the Company to return to profitability. The result has been driven by a strong performance at Andorinhas in Brazil, in addition to the profitable sale of the stake in Volta Resources and the initial payment received for the iron ore transaction at Andorinhas.

"Ramp up at Casposo has been slower than planned. We do however have a good understanding of what changes need to be made and have plans in place to move forward with the modifications as quickly as possible and are confident we will be achieving budget throughput rates in the June quarter.

"The Board reconfirms its intention to pay a dividend to shareholders once Casposo reaches budget levels."

Troy Resources NL advises that the Half Year Financial Results for the half year ended 31 December 2010 are now available via the Troy website www.troyres.com.au under "Latest Announcements". The financial statements can also be found under the Company's profile on the SEDAR website www.sedar.com.

Geological information in this Report has been compiled by Troy's Vice President Exploration & Business Development, Peter Doyle, who:

  • Is a full time employee of Troy Resources NL
  • Has sufficient experience which is relevant to the type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'
  • Is a Fellow of the Australasian Institute of Mining and Metallurgy
  • Has consented in writing to the inclusion of this data

Information of a scientific or technical nature in this report was prepared under the supervision of Peter J. Doyle, Vice President Exploration and Business Development of Troy, a "qualified person" under National Instrument 43-101 – "Standards of Disclosure for Mineral Projects", a member of the Australasian Institute of Mining and Metallurgy. Mr. Doyle has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration, and to the activity he is undertaking, to qualify as a "competent person" as defined in the 2004 edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr. Doyle has reviewed and approved the information contained in this report. For further information regarding the Company's projects in Brazil, Australia and Argentina, including a description of Troy's quality assurance program, quality control measures, the geology, samples collection and testing procedures in respect of the Sandstone project please refer to the technical reports filed which is available under the Company's profile at sedar.com or on the Company's website.

This report contains forward-looking statements. These forward-looking statements reflect management's current beliefs based on information currently available to management and are based on what management believes to be reasonable assumptions. A number of factors could cause actual results, performance, or achievements to differ materially from the results expressed or implied in the forward looking statements. Such factors include, among others, future prices of gold, the actual results of current production, development and/or exploration activities, changes in project parameters as plans continue to be refined, variations in ore grade or recovery rates, plant and/or equipment failure, delays in obtaining governmental approvals or in the commencement of operations.

For purposes of Clause 3.4(e) in Canadian Instrument 43-101, the Company warrants that Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability.

ABN  33 006 243 750

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