DIO 0.00% $1.27 dioro exploration nl

new gold mine to go ahead

  1. 343 Posts.
    DIORO EXPLORATION NL 2002-12-18 ASX-SIGNAL-G

    HOMEX - Perth

    +++++++++++++++++++++++++
    The board of Dioro Exploration NL is pleased to advise that following
    the completion of the final feasibility study of the Frog's Leg gold
    mine, the Mungari East joint venture partners (Mines and Resources
    Australia Pty Ltd 51% and Dioro Exploration NL 49%) have unanimously
    agreed to proceed with the development of the Frog's Leg Gold Mine.

    A Notice of Intent (NOI) will now be lodged with the Department of
    Mines and Petroleum Resources, with mining scheduled to commence in
    late March 2003 and milling scheduled to commence in the second
    quarter of 2003.

    KEY POINTS OF THE OPEN PIT FEASIBILITY STUDY

    * Open pit production estimated to recover 108,500 ounces (535,000
    tonnes @ 6.64 g/t) from two pits developed over the central and
    southern zones at Frog's Leg to a depth of 95m and 105m respectively.

    * After the open pit mining phase, the project will continue
    underground. Based on the current open ended project resource
    envelope, 8 years of underground mining is envisaged.

    * Gross revenue of $59.6 million (Dioro Share $29.2 million) from
    open pit mining over a 22 month period.

    * Cashflow of $25.7 million from open pit development (Dioro Share
    $12.6 million) after royalty and before capital expenditure and
    development costs.

    * Capital expenditure and development costs of $3 million (Dioro
    Share $1.47 million) - these costs are at the low end for open pit
    developments in Australia.

    * The cashflow estimate is based upon a gold price of only A$550, and
    only includes proven and probable reserves. No allowance has been
    made for inferred resources which are recoverable as part of the
    mining process.

    * Sensitivity studies indicate the inferred resources could add up to
    8% to the cashflow, and a gold price of A$600 could add up to 19% to
    the projected cashflow.

    * The total resource at Frog's Leg remains 786,000 ounces and is open
    at depth and along strike.

    * Campaign-based milling is planned to commence in the second quarter
    of 2003. Flexibility is available to the joint-venture with
    arrangements in place between the operator and Three Mile Hill
    facilities owner, and advanced discussions are underway for the joint
    venture to consider utilising other local milling facilities.

    * Metallurgical testwork has determined all ore types are simple free
    milling with no specific metallurgical issues. Testwork recoveries
    were between 94% and 98% and an average 95% was used as mill recovery
    in pit optimisations and cashflow analyses.

    * The underground scoping study has indicated mining should commence
    on the central pit to allow early placement of the in-pit underground
    decline to access underground ore from the central and northern zones
    of Frog's Leg. Additional underground resource drilling will commence
    in the first quarter of 2003 with an underground feasibility study to
    follow.

    Pre-mining pit dewatering, site preparation and grade control
    drilling will commence immediately approvals have been received from
    the various state government departments.

    The possible options to increase the production rate, optimise early
    cashflow, and thereby reduce the overall time of the open pit phase
    of mining and maximise return, are currently being reviewed by the
    joint venture partners.


    D McArthur
    DIRECTOR
 
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