CMX climax mining limited

ground next to alk & more.....

  1. 13,641 Posts.
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    CMX have 289m shares with the top 20 holding 84% so when gold trends higher you would expect more interest in this next to ALK's Wyoming prospect where recent results about doubled the price of ALK.NCM drilling on CMX tennaments next to their Cardia mine etc etc. this could be the last of the 'cheapies'.

    Chairman`s Address to Shareholders


    HOMEX - Sydney

    The objectives for the 2001/2002 year were to determine the
    feasibility of a number of alternative developments for the Dinkidi
    gold, copper deposit in the Philippines, which would require initial
    capital of less than US$50 million, thereby increasing the
    probability of early development, and to progress exploration on our
    more significant properties of Didipio and Paco in the Philippines,
    Mistry in Fiji, and Junction Reefs in NSW, Australia.

    In the light of the prevailing very difficult conditions for the
    mining industry the Company also sought to significantly reduce
    operating costs.

    The political environment in the Philippines has improved since the
    collapse of the Estrada government which led to the halting of the
    proposed financing of the US$132.5 million block cave development of
    Dinkidi in early 2001. The public statements of President Gloria
    Macapagal-Arroya seeking the alleviation of poverty and creation of
    employment through foreign investment, coupled with a firmer gold
    price in the latter part of this year, have seen renewed interest in
    the exploration potential of the country. Anglo American, in joint
    venture with Philex Gold, continue to have major drilling success at
    the gold, copper discovery at Boyongan in north east Mindanao, near
    the Company's Paco prospect, and three small Australian public
    companies, Lafayette Mining Limited, Red 5 Ltd and Indophil Resources
    NL have raised funds in Australia for potential mine developments in
    the Philippines.

    Several major companies have inspected the Papaya prospect within the
    Didipio FTAA and discussions as to a farmin are continuing. This area
    of Miocene alkaline volcano-plutonic complex covers an area of some
    50sqkms, lies about 12kms to the west of Didipio and has a similar
    geological character to Boyongan.

    The Papaya complex hosts four areas of gold, copper mineralisation
    associated with quartz monzonite intrusions. The most interesting
    prospect, covers a roughly circular area of alteration, seven kms in
    diameter. This large area of alteration was identified from the
    Company's geological mapping, air magnetic and radiometric surveys.

    Extensive geochemical sampling subsequently established that
    anomalous gold and copper is pervasive with higher grades evident in
    areas of potassic-magnetite altered monzonite, which includes a
    5-metre channel sample at Ubon Creek returning 3.7g/t gold, 0.1%
    copper, 0.1% molybdenum.

    In the Didipio Valley intrusive complex to the east of the Papaya
    prospect, discussions are progressing on potential farmin to this
    area of 16sqkm which hosts some 18 gold, and gold, copper
    mineralised prospects and includes the Dinkidi gold, copper deposit.

    Feasibility studies completed in 1996 established a measured,
    indicated and inferred resource of 121 million tonnes of 1.49g/t gold
    equivalent at a 0.5g/t equivalent cut-off for Dinkidi. A feasibility
    study in 2000 indicated an underground block cave development with a
    mining reserve of 17.758 million tonnes of 3.04g/t equivalent at a
    2g/t equivalent cut-off was viable at US$325 oz gold and US$0.75
    cents /lb copper. Offers of equity and debt finance to meet the
    US$132.5 million cost of development were made in the 2000 year, but
    financing was not completed due to the perceived change in Philippine
    risk and weakening commodity prices.

    Consequently, the Company decided that a smaller scale, staged
    development, requiring no more than US$50 million of initial capital
    would be more appropriate. Through the 2001/2002 year, studies have
    been conducted which indicate that a number of alternate developments
    are possible using cut-off grades between 0.5g/t gold equivalent, up
    to 5g/t gold equivalent. With the benefit of these studies and an
    improved commodity environment, the Company, in the third quarter of
    2002, began seeking equity partners, a potential operator and
    financing for both the small and large scale developments.

    On the island of Mindanao to the south of the main island of Luzon
    where Didipio is located, Climax completed the farmout of its Paco
    gold, copper prospect to AurionGold Limited (now Placer) in June of
    this year. Aurion may earn a 51% interest by spending US$3.25

    The property lies 1.5kms west of Boyongan and has a similar
    geological environment. Broker estimates of Boyongan suggest some 280
    million tonnes of 0.97g/t gold and 0.43% copper with the prospect of
    a smaller tonnage of much higher grade indicated by an intercept of
    187 metres averaging 4.47g/t gold, 2.58% copper.

    Drilling on Paco began in October and the initial 2000 metre diamond
    drilling programme should be concluded by February. Two rigs are on
    site and a third should begin shortly.

    In Australia, our Taroona gold, copper prospect in NSW was farmed out
    to MIM who conducted geophysical studies and drilled 3 holes
    identifying a mineralised hydrothermal breccia system. Adjacent to
    our Wyanga property, Alkane Exploration Limited has made a promising
    gold discovery at its Wyoming prospect.

    Newcrest Mining Ltd continued its aggressive exploration of the
    Company's Junction Reefs property in NSW which is adjacent to their
    Cadia and Ridgeway gold, copper mining operations. Newcrest spent
    $2.8 million on deep drilling in the year seeking Ridgeway style
    mineralisation, and may earn a 51% interest in the Junction Reefs
    area by expending $14 million on exploration. At the end of June they
    had spent $4.6 million.

    Long intercepts of low grade gold, copper mineralisation similar to
    that found in the halo surrounding Ridgeway were located at the
    Gooley's, Warrangong and Randall's prospects. At the Black Rock
    prospect 7 diamond core and 12 reverse circulation holes intersected
    elevated gold values suggesting the gold mineralisation is in the
    distal part of a porphyry system.

    Results have been very encouraging and we expect a similar level of
    expenditure on exploration this year.

    At our Mistry property in Fiji, Millennium Mining (Fiji) Ltd is
    earning a 51% interest by expending $2 million on exploration.
    Following the relogging of Climax Mining's core and reverse
    circulation samples Millennium carried out geochemistry to better
    locate the mineralised shear that connects the Mistry gold mine to
    the Faddys gold resource on the Mistry tenement. A drilling programme
    of 1,600 metres commencing in early 2003 is proposed to test the
    Faddy's deposit downdip and laterally, which has a resource potential
    of the order of 350,000 oz.

    We were pleased we were able to introduce farmin partners to a number
    of our exploration properties in what is still a difficult market for
    exploration and we are hopeful of farming out more properties in the
    coming year.

    We look forward to the active drilling programmes at Paco, Junction
    Reefs and Mistry and are confident we can introduce exploration
    partners to the high exploration potential of the Didipio FTAA and
    our properties in the Lachlan Fold Belt of NSW.

    We also feel confident that we can secure equity partners in the
    coming year, provided gold prices hold at current levels, to progress
    the development of Dinkidi in one of the development alternatives we
    have investigated during this year.

    I wish to thank shareholders for their continuing support and
    patience regarding the Philippines and to thank our staff, small
    number that they are now, for continuing to seek our objectives with
    optimism, in a very difficult environment.

    Thank you all for coming.


    Aspects of this report that relate to Mineralisation, Mineral
    Resources or Ore Reserves are based on information compiled by
    persons who:

    * are Fellows or Members of the Australasian Institute of Mining and
    Metallurgy and/or the Australian Institute of Geoscientists, and

    * are full time employees of the Company or joint venture
    organisations (unless otherwise noted), and

    * have sufficient relevant experience of the activity undertaken and
    of the mineralisation style and type of deposit described.

    They qualify as Competent Persons as defined in the 1999 Edition of
    the "Australasian Code for the Reporting of Resources and Reserves".
    A list of the names of the Competent Persons is available upon
    request. The above statement fairly reflects the reports prepared by
    these Competent Persons and has been prepared by Paul Joyce as
    Competent Person for Climax Mining Ltd. Paul Joyce consents to the
    inclusion in this report of the matters based on their information in
    the form and context in which it appears.

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