PROJECTS AND EVALUATION

LOULO UNDERGROUND DEVELOPMENT PROJECT

Yalea

Excavation and construction of the boxcut for the Yalea underground development made good progress during the quarter. The inauguration ceremony for the Yalea underground mine was held on 17 October 2006. Bedrock was exposed during November and the first blast into solid rock initiated the twin decline development on 22 December. 

Most of the underground heavy vehicle fleet equipment has been delivered to site. A maintenance agreement was reached with Manutention Africaine (the local Caterpillar dealership) for a service contract for 2007. 


Gara

During the quarter, the proposed mine was redesigned and a mining schedule was prepared for the Gara underground mine based on the increase of resources by 800 000 ounces. The latest resource totals 25 million tonnes at 4.11g/t for 3.3 million ounces. 

The redesign for Gara has been based on the Yalea design with a production rate increase to 100 000 tonnes per month (previously 60 000 tonnes per month).

A twin ramp system, developed from the open pit instead of a boxcut, one towards the north and the other towards the south, will divide the underground mine in two separate mining and ventilation districts. A conveyor belt system will be used to transport ore and waste out of the mine rather than the conventional truck transport and waste passes will be developed from inside the pit to facilitate backfill.

Based on the enlarged resource and this re-design, the total underground ore reserve for Gara now amounts to 11.12Mt at a grade of 3.87g/t for total gold of 1.38 million ounces an increase of 720 000 ounces over the previous reserve. It is currently expected that the development of the Gara underground mine will commence early in 2009 with first ore delivered to the plant at the end of 2009.


TONGON PROJECT

The team is progressing with the implementation of a 30 000 metre drilling programme at the Tongon project which will form the basis for a feasibility study on the development of the mine. A further suite of metallurgical sampling has been scheduled in order to better characterise the ore and develop the detailed flow sheet and plant design required for the bankable feasibility study.