|
|
Report on Activities for the Quarter ended 31 March 2005
The Quarterly Report is also available as a PDF File For Printing & Offline Viewing
Click here for PDF File (760K)
|
To view the PDF File you will require Acrobat Reader
You can download your copy of Acrobat Reader Here -
|
 |
HIGHLIGHTS
- Beaconsfield Mine Joint Venture (BMJV) gold production was 29,219 ounces (35,666 ounces previous quarter). Despite the loss of 9 days production in February due to severe weather conditions, a near record 64,325 tonnes of ore were milled (65,207 tonnes previous quarter) at an average head grade of 14.9 g/t gold (18.2 g/t previous quarter). The head grade was affected by stope sequencing that resulted in a number of high grade, high tonnage stopes being unavailable for mining during the quarter.
- BMJV direct operating expenditure per tonne milled was A$166 (A$167 previous quarter). Direct operating expenditure was A$366 per ounce (A$306 previous quarter) versus gold revenue for Beaconsfield Gold of A$569 per ounce (A$558 per ounce previous quarter).
- Beaconsfield Gold cash flow from its 48.49 % direct interest in the BMJV for the quarter was approximately $2.1 million ($3.2 million previous quarter).
- The underground drilling program at the Beaconsfield Mine continued with approximately 11,500 metres in 32 holes remaining to be drilled.
- Exploration drilling results at Beaconsfield Gold's wholly owned North Pease Creek property 3.5 km northwest of the Beaconsfield Mine are interpreted as indicating the existence of a sub-vertical fault (potentially the host of mineralisation similar to the Tasmania Reef at the Beaconsfield Mine) through the favourable Mine Sequence rocks. Drill testing of the interpreted fault is expected to commence in May.
- Beaconsfield Gold completed arrangements with the Commonwealth Bank of Australia for a new package of banking facilities.
- Beaconsfield Gold had $6.9 million in readily accessible cash at 31 March 2005.
- Beaconsfield Gold commenced dividend payments with an unfranked interim dividend of 1.5 cents per share being paid on 8 April 2005.
|
1. BEACONSFIELD MINE JOINT VENTURE (BMJV) (Beaconsfield Gold Direct Interest 48.49%)
The participants in the unincorporated BMJV, which operates the Beaconsfield Mine at Beaconsfield in north-east Tasmania, are the Allstate group with a 51.51% interest and the Beaconsfield Gold group with a 48.49% interest. Allstate is Manager of the BMJV, and the BMJV Mine Manager and all personnel reporting to him are employed by Allstate.
Joint Administrators were appointed to Allstate on 8 June 2001 and became Joint Deed Administrators when Allstate creditors approved a Deed of Company Arrangement in late 2001.
1.1 OPERATING PERFORMANCE
Gold production from the Beaconsfield Mine was 29,219 ounces, 18% less than for the December 2004 quarter (35,666 ounces). Despite continued near-record mill throughput (1.4% below December quarter), lower gold production reflected the 18% reduction in head grade of 14.9 g/t (September quarter - 18.2 g/t). The head grade was affected by stope sequencing that resulted in a number of high grade, high tonnage stopes being unavailable for mining during the quarter.
Advance for the mine access decline totalled 174 metres, with the decline face at a depth below surface of 1,040 metres at 31 March 2005. The decline / waste development layout and the modified 1/2 Upper / Avoca mining method continue to provide benefits to the operation.
52,954 tonnes of ore grading 17.2 g/t gold were mined during the quarter (December quarter 2004: 71,404 tonnes at 17.9 g/t). The 26% reduction in tonnage compared to the record December quarter resulted from the unavailability of a number of high tonnage stopes during the quarter.
The Hart shaft continued to perform well with 59,720 tonnes of ore and 6,470 tonnes of waste (total material 66,190 tonnes) hoisted during the March quarter. A further 28,918 tonnes of waste rock were utilised underground as stope backfill. The high rate of waste rock backfill placed compared to the December 2004 quarter (11,969 tonnes) resulted from a number of high tonnage stopes all being backfilled during the quarter.
Despite the loss of 9 days production in February following the loss of power caused by severe weather conditions, a near-record 64,325 tonnes of ore were milled (December 2004 quarter 65,207 tonnes). Recovery to bullion was 95.1%.
1.2 EXPENDITURE
Direct operating expenditure was $10.705 million, 1.9% lower than for the December 2004 quarter ($10.907 million). In terms of cost per tonne milled, the March 2005 quarter figure of $166 per tonne was marginally lower than the December 2004 quarter figure of $167 per tonne.
Capital expenditure was $1.995 million (December 2004 quarter $2.391 million). The main abnormal capital expenditure activity continued to be the extensive ore reserve diamond drilling program, which made up 29% of the capital costs for the quarter.
1.3 UNDERGROUND DRILLING OF THE TASMANIA REEF
The current underground diamond drilling program (F series) commenced in December 2003 and is now planned to be completed in October 2005. Assay results received during the March quarter are listed below.
Hole /
|
Easting
|
Northing
|
Depth
|
Intersection
|
E.H.T
|
Grade
|
Intersection
|
(m)
|
(m)
|
(m)
|
Length
|
(m)
|
(g/t Au)
|
(1)
|
|
|
(2)
|
(m)
|
(3)
|
|
F64
|
3,027
|
4,498
|
1,142
|
1.1
|
0.8
|
6.77
|
F65
|
2,987
|
4,454
|
1,198
|
1.4
|
0.9
|
8.12
|
F66
|
3,012
|
4,531
|
1,107
|
1.9
|
1.6
|
3.20
|
F67
|
Hole abandoned - off line
|
F68HW
|
3,045
|
4,454
|
1,188
|
1.0
|
0.7
|
10.51
|
F68
|
3,047
|
4,452
|
1,192
|
0.3
|
0.2
|
63.00
|
F69HW
|
3,065
|
4,496
|
1,127
|
1.2
|
1.0
|
17.78
|
F69
|
3,067
|
4,496
|
1,135
|
1.4
|
1.0
|
4.69
|
F70HW
|
3,132
|
4,448
|
1,156
|
0.2
|
0.1
|
7.68
|
F70
|
3,171
|
4,429
|
1,227
|
0.4
|
0.2
|
2.24
|
F71HW
|
3,092
|
4,523
|
1,072
|
0.6
|
0.5
|
4.80
|
F71
|
3,101
|
4,524
|
1,092
|
2.8
|
2.1
|
7.95
|
F72HW
|
3,134
|
4,521
|
1,070
|
1.2
|
1.1
|
17.96
|
F72
|
3,141
|
4,522
|
1,082
|
4.8
|
3.3
|
11.62
|
F73
|
3,005
|
4,455
|
1,196
|
2.2
|
1.5
|
20.12
|
F74HW
|
3,136
|
4,485
|
1,103
|
3.0
|
2.1
|
26.64
|
F74
|
3,152
|
4,481
|
1,127
|
3.3
|
1.6
|
7.50
|
F75HW
|
3,068
|
4,458
|
1,174
|
0.6
|
0.4
|
17.50
|
F75
|
3,073
|
4,455
|
1,196
|
1.2
|
0.7
|
37.00
|
F77HW
|
3,109
|
4,468
|
1,144
|
0.3
|
0.3
|
9.91
|
F77
|
3,124
|
4,463
|
1,182
|
0.7
|
0.4
|
5.38
|
|
|
|
|
|
|
|
(1) FW and HW refer to ore splays in the footwall and hangingwall respectively of the Tasmania Reef.
(2) Estimated depth below surface (Hart Shaft collar 2047 metres RL).
(3) E.H.T is the estimated horizontal thickness of the reef intersection.
All holes completed during the March 2005 quarter were drilled from the eastern cuddies located in the hangingwall on the 870 metre level underground. A total of 4,797 metres were drilled during the March quarter, bringing total drilling to date to approximately 23,000 metres.
During the quarter, Allstate as Manager of the BMJV reviewed the orebody data gathered to date and reassessed the likely mechanisms for mineralisation of the Tasmania Reef. The main theory of the revised Allstate model is that the current high grade production area above the fold zone represents a single plume of mineralisation which was channelled off the Cabbage Tree Thrust at the apex of the fold hinge and ascended vertically up the Tasmania Reef shear. Allstate consider it possible that the "F21 Zone" mineralisation represents the top of a separate en echelon plume which is similarly constrained by the Tasmania Reef Shear and the host stratigraphy. As a result, a portion of the drilling by the BMJV has been directed towards testing for Tasmania Reef development at depth below the "F21 Zone" (the "Deep Zone"). The first hole in this area has been completed and intersected around 2.5 metres horizontal width of well mineralised Tasmania Reef. Assay results are awaited.
In addition to the "Deep Zone" where drilling will be completed to a nominal 50 x 50 metre offset pattern, the "840E Zone" and the "F21 Zone" will be fully drilled out on a 25 x 50 metre pattern, and three holes will be drilled in a "Keel Zone" beneath the current production area. Completion of the current phase of the drilling program is expected by October 2005. Approximately 11,500m in 32 holes remains to be drilled.
As previously reported, a hangingwall splay occurs in the eastern portion of the "F21 Zone". Drilling has continued to define the hangingwall splay, but it remains insufficiently understood.
The attached long section of the Tasmania Reef shows the location of the zones referred to above.
1.4 BMJV REGIONAL EXPLORATION
As previously reported, the exploration agreement with Diamond Ventures NL covering the BMJV tenements has been terminated.
An application by the BMJV to Mineral Resources Tasmania (MRT) for a two year extension over approximately half of the exploration licence EL 20/94 to the south of the Beaconsfield Mine has been verbally accepted by MRT, with a request made for the BMJV to submit a partial relinquishment report for the relevant portion of the tenement. That report was forwarded to MRT during the March quarter. The purpose of the extension is to allow exploration drilling to be carried out on the principal remaining areas of interest at Middle Arm Gorge and the historical Salisbury Gold Field.
The Pease Creek Retention Licence RL 1/1999 to the north of the Beaconsfield Mine, which was due to expire in January 2005, has been extended by MRT until January 2007. No exploration work has been undertaken by the BMJV on the tenement in recent years.
1.5 ARBITRATION AWARD
As previously reported, an arbitration award was made in favour of the BMJV participants (Beaconsfield Gold group 48.49% and Allstate group 51.51%) against ACN 005 585 795 Pty Ltd (formerly Brown & Root Engineering & Construction Pty Ltd ("BREC")) and Batepro Australia Pty Ltd ACN 009 006 777 ("BA"). The arbitrator found BREC and BA to be jointly and severally liable to the BMJV participants for $60,366,785, together with interest after 17 January 2004 at the rate of $29,292 per week.
Subsequent to the arbitration award, liquidators were appointed to both BA and BREC. Beaconsfield Gold and the Deed Administrators of the Allstate group are continuing to deal with the liquidators of both BA and BREC with regard to the arbitration award.
Separately, the BMJV participants are currently in discussions with the professional indemnity insurer of BREC and BA with a view to recovering insurance monies presently in dispute ($20 million plus interest from the time of the arbitration award).
2. BEACONSFIELD GOLD NL CORPORATE
2.1 EXPLORATION OF BEACONSFIELD GOLD'S 100% OWNED TENEMENTS
Expenditure on Beaconsfield Gold's 100% owned tenements during the quarter totalled $34,000.
North Pease Creek Project
Attached to this quarterly report is a location plan titled "North Pease Creek Project - Proposed Exploration Drillout" which should be viewed in conjunction with the following text.
The North Pease Creek property lies immediately northwest of the Retention Licence of the Beaconsfield Mine Joint Venture (BMJV) which covers the Pease Creek Prospect discovered in the 1990's by the BMJV 3 km northwest of the Beaconsfield Mine.
The geology and mineralisation at the Pease Creek Prospect have similarities to that at the Beaconsfield Mine. The mineralisation is quartz vein-related and occurs in siliceous sediments that are interpreted to be extensions of the sedimentary units that host the major quartz vein mineralisation (the Tasmania Reef) at the Mine. The best intersection at the Pease Creek Prospect from drilling in the 1990's was 3.5 m at 11.1 g/t Au, within which 1.5 m graded 21.1 g/t Au. The higher-grade interval corresponded to a brecciated zone containing quartz veinlets and limonite boxworks after pyrite.
Follow-up exploration at the Pease Creek Prospect was planned by the BMJV in the 2000/2001 year, but was not carried out due to financial constraints of the BMJV at that time. It remains a compelling target for further exploration.
The "Mine Sequence" rocks that host the major Tasmania Reef at the Beaconsfield Mine (Ordovician conglomerate, sandstone and siltstone) occur between two well-defined, north-westerly trending thrust faults - the Cabbage Tree Thrust and the Cobblestone Creek Thrust. Mine Sequence rocks are known from drilling at the Pease Creek Prospect and Beaconsfield Gold's geologists have confidently interpreted extensions of both the Mine Sequence rocks and of the two enclosing thrust faults to the northwest of the Pease Creek Prospect under a cover of Tertiary sediments into Beaconsfield Gold's wholly owned North Pease Creek property. Some 2.1 km of prospective Mine Sequence rocks are interpreted to exist in the North Pease Creek property commencing from a point only 500 m northwest of the Pease Creek Prospect. The belt of prospective Mine Sequence rocks is only around 400 m wide and provides excellent focus for further exploration. Beaconsfield Gold's target is another major quartz vein system analogous to the Tasmania Reef.
In late 2004, Beaconsfield Gold drilled the first ever holes at North Pease Creek. All three relatively shallow vertical holes (NPC 1-3) were successful in (a) confirming the interpreted presence of Mine Sequence rocks and (b) intersecting gold mineralisation. The best interval was 1.0 m at 3.8 g/t Au in NPC-2, the most northerly hole of the three. All three holes contained mineralised intervals, a significant result considering they were drilled blind through about 65 m of Tertiary sediment cover.
During the March 2005 quarter, drilling commenced on five vertical drill holes (NPC 4-8). Initially all holes were drilled through the cover of Tertiary sediments and cased off preparatory to deepening by reverse circulation (RC) drilling. Hole NPC 5 (190 m) and NPC 8 (100 m) were completed by quarter's end. Assays for these two holes are awaited. RC extensions of the other holes will be completed in the June quarter.
Holes NPC 1-4 and 8 all intersected approximately 65 m of Tertiary sediment cover before intersecting the underlying prospective Mine Sequence rocks. Significantly, the three most northerly holes, NPC 5-7, intersected only about 35 m of Tertiary sediments before intersecting the Mine Sequence rocks. The abrupt 30 m change in elevation of the buried surface of the Mine Sequence between holes NPC 4 and NPC 5, which are only 40 m apart horizontally, is interpreted as indicating the existence of a sub-vertical fault through the Mine Sequence. As the Beaconsfield Mine deposit is hosted by a large sub-vertical fault, this newly discovered feature is considered prospective and will be tested by RC drilling during the June quarter.
During the course of 2005, it is planned to progressively test the prospective belt of Mine Sequence rocks on the North Pease Creek property for analogues of the Beaconsfield Mine's Tasmania Reef. Although the cover of Tertiary sediments makes exploration somewhat difficult, the confirmed presence of Mine Sequence rocks hosting gold mineralisation indicates the North Pease Creek property warrants extensive exploration testing.
Cobblestone Creek Project
During the March quarter, a vertical RC percussion wildcat drill hole, EPC-1, was drilled approximately 1.7 km north east of the Pease Creek Prospect to test a coincident geophysical and geochemical anomaly. The hole drilled non-prospective Permian sedimentary cover to 150 m without encountering any eastern repetition of the prospective Ordovician Mine Sequence rocks.
2.2 GOLD HEDGING AND GOLD PROCEEDS
New banking arrangements with the Commonwealth Bank of Australia have provided the Company with the ability to hedge up to a maximum of 75 % of the Company's gold reserves at the Company's discretion.
At 31 March 2005, the Company's hedge book consisted of 44,681 ounces of flat forwards with deliveries out to December 2006 at an average deliverable price of $583 per ounce, well in excess of the current spot price.
The marked-to-market value of the hedge book at 31 March 2005, when the spot price of gold was A$552.82, was positive $89,000.
2.2.1 Gold Hedging as a Percentage of Ore Reserves
The BMJV ore reserves as at 31 March 2005 were approximately 346,000 ounces (based on 31 December 2004 reserves and gold milled during the March quarter), of which Beaconsfield Gold's 48.49% direct interest was approximately 168,000 ounces. As a percentage of those ore reserves therefore, Beaconsfield Gold at 31 March 2005 was approximately 27% hedged.
2.2.2 Average Received Price per Ounce
Total net gold book proceeds and effective average received price per ounce of production are approximated in the following table.
2.3 BEACONSFIELD GOLD NL (BCD) CASH FLOW FROM ITS 48.49% DIRECT BMJV INTEREST
Cash flow, before corporate costs, is approximated in the following table.
2.4 PAYMENT OF MAIDEN DIVIDEND
On 8 April 2005 the Company paid its first dividend to shareholders, an unfranked interim dividend of 1.5 cents per fully-paid share.
In a release to the Australian Stock Exchange, Chairman Denis Clarke said: "The declaration of Beaconsfield Gold's first dividend provides confirmation of the financial strength of the Company and its positive outlook. The Company is now in a position to capitalise on its acquisition and exploration opportunities."
2.5 CASH POSITION
At 31 March 2005, the Company held approximately $6.9 million of readily accessible cash in accounts with its new banker, Commonwealth Bank of Australia ("CBA").
As previously reported, secured bank debt was fully repaid on 25 January 2005.
2.6 NEW BANKING ARRANGEMENTS WITH CBA
On 25 January 2005, the Company completed arrangements for new banking facilities with CBA.
The new CBA facilities comprise:
- A $3 million overdraft facility to fund short term working capital requirements. Based on present cash balances and projected cash flows, it is anticipated that in normal circumstances this facility will not need to be drawn upon.
- A $3.35 million performance bond facility to support existing guarantee obligations without the requirement for cash collateral.
- A gold hedging facility providing the Company with the ability to forward sell up to a maximum of 75% of the Company's gold reserves. This gives the Company the flexibility to lock in a percentage of its future gold production at attractive Australian dollar per ounce forward prices.
The CBA facilities are initially available until 31 December 2006.
2.7 CLAIM AGAINST ALLSTATE EXPLORATIONS NL ("Allstate")
Beaconsfield Gold lodged a Proof of Debt on 3 November 2004 with the Allstate Deed Administrators for $29,271,854, representing 48.49 % of the damages awarded to the Beaconsfield joint venturers in the claim against BREC and BA. The Proof of Debt alleges that Allstate was negligent in the performance of its duties as manager of the joint venture and was in breach of its duties owed to the joint venturers, under the terms of the Beaconsfield Joint Venture Agreement, in its dealings with BREC and BA in connection with the contract to design, supply, construct and commission the gold ore treatment plant and bacterial oxidation plant at the Beaconsfield mine.
On 18 April 2005, Allstate formally advised the Company that the Proof of Debt had been rejected.
Beaconsfield Gold is taking legal advice in regard to the process involved for the Company to pursue its claim against Allstate.
2.8 CURRENT BEACONSFIELD GOLD ISSUED SECURITIES AT 31 MARCH 2005
2.9 TENEMENTS
Beaconsfield Gold has interests in the following tenements in the Beaconsfield area.
2.9.1 BMJV Tenements (Beaconsfield Gold 48.49% Direct Interest)
2.9.2 Beaconsfield Gold 100% Owned Exploration Licences
2.10 INTERNET
Shareholders are reminded that ASX releases (including all quarterly and annual reports), can be viewed on the Company's web site: www.beaconsfieldgold.com.au
Shareholders who wish to receive Beaconsfield Gold ASX releases by e-mail are encouraged to contact the Company on: beaconsfieldgold@bigpond.com
Yours faithfully
Brian Coulter
Acting CEO
|
