Central Kalgoorlie Gold Mines Limited ABN 46 008 942 809 Level 4, 140 St Georges Tce, Perth, W.A. 6000 Telephone: (08) 9322 2288 P.O. Box 7752, Cloisters Square W.A. 6850 Facsimile: (08) 9324 2164 Email: [email protected]
31 July 2003 Pages 12
The Manager Australian Stock Exchange Limited Company Announcements Office PO Box H224 Australia Square SYDNEY NSW 2000
QUARTERLY REPORT FOR PERIOD ENDING 30 JUNE 2003
Highlights . Initial drilling at Sherlock Bay Nickel Project outlines continuous zone of nickel mineralisation over a strike length of 500 metres. . Increase in Measured Resource at Eureka . New Bulong Farm in agreement with Yilgarn Gold Limited
EXPLORATION
Sherlock Bay Nickel Copper Project. Drilling commenced at the Sherlock Bay Nickel Copper Project during the quarter with a total of 27 Reverse Circulation (RC) drill holes completed for a total of 4,021 metres. This drilling has outlined a continuous zone of nickel mineralisation within the eastern zone over a strike length of 500m (from 20575E to 21075E) and to a depth of at least 220m below the surface. Mineralisation grading over 0.5% Ni was intersected within 12 metres of the surface. The zone of nickel mineralisation grading over 0.5% Ni is open to the east with the
eastern most hole (SB 17) intersecting 15 metres averaging 0.55% Ni at a depth of approximately 70 metres below the surface. The mineralised zone is also open at depth with the two deepest holes intersecting significant mineralisation. SB 28 (20684E) intersected 32m averaging 0.51% Ni at a depth of 220 metres below the surface and SB 26 (20637E) intersected 29m at 0.60% Ni at a depth of 175 metres.
Mineralisation in the eastern zone seems to be terminated to the west by a transverse fault zone, which separates the eastern zone from the western mineralise d zone. Drillholes SB 19 to 21 and SB 23 to 24 were drilled within this fault zone with only a
minor width greater that 0.5% Ni intersected.
Of the 22 holes drilled east of the fault zone, nickel mineralisation in association with sulphidic black chert was intersected in 20 holes.
Best mineralisation was in drillhole SB 2 which intersected 50metres at 0.66% Ni from 48 metres to 98 metres. Within this zone was a width of 4 metres grading 1.32% Ni in an intersection of 17 metres of 0.78% Ni from 81 metres to 98 metres. Other mineralised intersections ranged in width from 6 metres to 35 metres with grades between 0.51% and 0.76% Ni. The two holes that failed to intersect nickel mineralisation were collared to the south of the mineralised zone as a result of difficulty in re-establishing the position of earlier drillholes.
As previously announced on 19 May 2003, CKG intends to exercise its option to acquire the Sherlock Bay Project subject to shareholder approval. A draft Notic e of Meeting and Explanatory Memorandum has been lodged with the ASX and ASIC and it is expected that the Notice of Meeting will be mailed to shareholders in early August for a meeting of shareholders to be held in mid September.
Background to Sherlock Bay Nickel Copper Project, Karratha, WA. The Sherlock Bay Ni Cu Project is well located, 7km off Highway 1, 50 minutes drive from Karratha. The deposit is situated close to road, rail, grid electricity, port and gas pipeline infrastructure, as well as the townships of Roebourne, Karratha and Whim Creek. Nearby infrastructure developments over the last 30 years have considerably enhanced the economic potential of this project. Favourable preliminary metallurgical test work was reported in 1973, with >80% nickel and copper recoveries into a marketable concentrate (8-12% Ni content) .
Eureka Gold Project On 2 July 2003 the Company announced an updated Measured Resource estimate of 451,000 tonnes at 4.4g/t Au containing 64,200 ounces of gold at its Eureka Project north of Kalgoorlie. The new resource estimate follows evaluation of drilling completed since an initial Measured Resource of 250,000 tonnes at 4.8 g/t Au containing 38,000 ounces of gold was announced in September 2002.
The resource is contained in three shoots around and beneath the existing Eureka open pit: Shoot Tonnes Grade Contained Gold Northern Shoot 350,000 4.8 g/t Au 54,000 ounces Central Shoot 24,000 3.5 g/t Au 2,700 ounces Southern Shoot 77,000 3.0 g/t Au 7,500 ounces Total 451,000 4.4 g/t Au 64,200 ounces The Northern Shoot extends from 4145N to 4310N, between RL 360 (60m below the surface) and RL 190 (230 m below the surface) and is open at depth over a strike length of 150m. The bulk of the resource lies beneath the depth of the old pit with a wedge extending 50 metres above the pit floor in the immediate northern batter of the pit. The Central Shoot extends from 4050N to4105N, between RL 310 (the floor of the old pit) and RL 260 and the Southern Shoot extends from 3970N to 4030N, between RL 370 (50m below the surface) and RL 250 (170m below the surface). Both the Central and Southern Shoots are open at depth.
The directors also wish to announce that, subject to shareholder approva l, CKG intends to exercise its option to acquire the remaining 50% of the Eureka tenements under the terms of its April 2002 agreement with Jasper Mining Pty Ltd. CKG is at present in discussions with a Kalgoorlie based mining company interested in mining part of the Northern Shoot. Final pit designs are about to be lodged with the Mines Department for approval to mine. The Company.s objective is for further exploration and drilling of the Eureka project to be self funding and is hopeful that successful negotiations towards mining the resource will achieve this objective.
New Bulong Farm In Agreement Exploration continued at the New Bulong Project, 30 km east of Kalgoorli e, which is covered by the Farm in Agreement between CKG and Yilgarn Gold Limited ( Yilgarn). A total of 2,297 metres of RC drilling was completed during the quarter.
Under the terms of the agreement, CKG has the right to earn a fifty percent equity in the New Bulong Project which comprises a contiguous block of 20 tenements covering 62 square kilometres. To earn its fifty percent interest CKG is required to spend $1,000,000 on drilling and exploration over two years. CKG must spend a minimum of $250,000 on exploration activities during the first six months of the Agreement to earn an initial 12.5% interest in the project. Following the expenditure of the initial $250,000, CKG will earn a further 5% interest for every additional $100,000 spent on the project to a maximum interest of 50% after expenditure of a total of $1,000,000.
Boundary Prospect CKG completed two phases of drilling totalling 2,297 metres at the Boundary Prospect during the quarter. Shallow gold mineralisation was intersected in all but six holes. 4
Best mineralization was as follows: Drillhole From To Interval Grade NBB 2 49m 56m 7m 6.72 g/t Au NBB 4 79m 81m 2m 10.80 g/t Au NBB 7 46m 50m 4m 7.72 g/t Au 57m 61m 4m 6.52 g/t Au NBB 8 46m 47m 1m 6.43 g/t Au 56m 57m 1m 4.21 g/t Au 79m 81m 2m 5.70 g/t Au NBB 10 34m 35m 1m 9.02 g/t Au 52m 55m 3m 3.90 g/t Au NBB 11 30m 32m 2m 5.40 g/t Au 39m 40m 1m 4.14 g/t Au 45m 49m 4m 3.80 g/t Au NBB 12 62m 65m 3m 3.70 g/t Au 85m 86m 1m 6.03 g/t Au NBB 26 79m 80m 1m 5.89 g/t Au Drilling by a previous explorer had returned intersections of: 19m at 8.5g/t Au in BRC33 from 38m to 57m and 6m at 4.3g/t Au in BRC32 from 35m to 41m.
Drilling was carried out to further define a zone of shallow gold mineralization indicated by previous drilling at the Boundary Prospect which is one of a number of highly prospective zones covered by the farm in agreement between CKG and Yilgarn Gold Limited.
Results in excess of 1g/t Au are summarised below: Drillhole From To Interval Grade NBB 1 32m 36m 4m 1.65 g/t Au NBB 2 49m 56m 7m 6.72 g/t Au including 54m 55m 1m 29.20 g/t Au 65m 69m 4m 2.36 g/t Au NBB 3 33m 39m 6m 2.50 g/t Au NBB 4 41m 43m 2m 1.64 g/t Au 51m 53m 2m 2.26 g/t Au 55m 59m 4m 1.70 g/t Au 79m 86m 7m 4.31 g/t Au including 79m 81m 2m 10.80 g/t Au NBB 5 68m 70m 2m 3.35 g/t Au NBB 6 32m 50m 18m 1.20 g/t Au NBB 7 41m 51m 10m 3.83 g/t Au including 46m 50m 4m 7.72 g/t Au 57m 61m 4m 6.56 g/t Au NBB 8 45m 52m 7m 2.12 g/t Au including 46m 47m 1m 6.43 g/t Au 63m 67m 4m 1.44 g/t Au 78m 83m 5m 2.86 g/t Au including 80m 81m 1m 9.18 g/t Au NBB 9 32m 33m 1m 1.32.g/t Au 38m 39m 1m 1.47.g/tAu NBB 10 31m 32m 1m 1.89.g/t Au 34m 35m 1m 9.02.g/tAu 38m 39m 1m 1.69.g/tAu 48m 50m 2m 2.90.g/t Au including 49m 50m 1m 4.51 g/t Au 51m 55m 4m 3.53 g/t Au
CORPORATE The Company has changed its financial year end from 31 December to 30 Ju ne. The Australian Securities and Investment Commission (.ASIC.) has granted CKG relief from compliance with sub-section 323(D) of the Corporations Act for the purpose of changing its financial year beginning on 1 January 2003. CKG.s next Annual Report will cover the period 1 January 2003 to 30 June 2003. CKG was previously controlled by American interests which had a December year end. These investors no longer have shares in the Company. The Company has made the change to a June 30 end of year so that its financial year end is in line with the end of the taxation year and the Directors feel that such a change will result in more efficient preparation and reporting of financial res ults. Redmond Drilling The Company has been advised that Redmond Drilling, in which CKG holds a 33% interest, has been placed in administration. In January 2002 CKG received from Redmond certain drilling equipment by way of a commercial settlement and leased it back to Redmond. The Administrator of Redmond Drilling is currently investigating the validity of CKG.s title to th is equipment. CKG is confident of the validity of its title to this equipment, and if the Administrator challenges that title, CKG intends to vigorously defend its ownership of the equipment. However, while strongly asserting its ownership of the equipment, CKG will work with the Administrator to achieve an early resolution of any matters arising from Redmond Drilling being placed in administration Yours sincerely
A L Gerick Managing Director Technical information contained in this report related to the Measured Resource estimate has been compiled by William D Goode. Mr Goode is a Member of the Australasian Institute of Mining and Metallurgy with over 20 years. experience in the Australian mining industry and has sufficient experience relevant to the style of mineralization and the type of deposit being reported on to qualify as a Competent Person as defined in the 1999 Edition of the .Australasian Code for Reporting of Mineral Resources and Ore Reserves.. Mr Goode is an independent geological contractor and consents to the inclusion of the information in this report.
Name of entity Central Kalgoorlie Gold Mines Limited
ABN Quarter ended (.current quarter.) 008 942 809 30 June 2003
Consolidated statement of cash flows Current quarter Year to date Cash flows related to operating activities $A.000 (...6....months) $A.000 1.1 Receipts from product sales and related debtors - - 1.2 Payments for (a) exploration and evaluation (168) (354) (b) development - - (c) production - - (d) administration (133) (308) 1.3 Dividendsreceived - - 1.4 Interest and other items of a similar nature received 1 1 1.5 Interest and other costs of finance paid - - 1.6 Income taxes paid - - 1.7 Other (provide details if material) - - Net Operating Cash Flows (300) (659)
Cash flows related to investing activities 1.8 Payment for purchases of: (a)prospects - - (b)equity investments - - (c) other fixed assets - - 1.9 Proceeds from sale of: (a)prospects - - (b)equity investments - - (c)other fixed assets - - 1.10 Loans to other entities - - 1.11 Loans repaid by other entities - - 1.12 Other (provide details if material) - - Net investing cash flows - - 1.13 Total operating and investing cash flows (carried forward) (300) (659)
+ See chapter 19 for defined terms. 30/9/2001 Append
1.13 Total operating and investing cash flows (brought forward) (300) (659)
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 579 1,179 1.15 Proceeds from sale of forfeited shares - - 1.16 Proceeds from borrowings - - 1.17 Repayment of borrowings - - 1.18 Dividendspaid - - 1.19 Other (provide details if material) - -
Net financing cash flows 579 1,179
Net increase (decrease) in cash held 279 520
1.20 Cash at beginning of quarter/year to date 253 12 1.21 Exchange rate adjustments to item 1.20 - -
1.22 Cash at end of quarter $532 $532
Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the
related entities
Current quarter $A'000
1.23 Aggregate amount of payments to the parties included in item 1.2 31
1.24 Aggregate amount of loans to the parties included in item 1.10 -
1.25 Explanation necessary for an understanding of the transactions
Consulting fees and reimbursement of expenses.
Non-cash financing and investing activities
2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows
A Placement of 19,295,331 ordinary shares @ 3 cents was made on 28 May 2003 raising $578,860 for working capital.
2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest
Financing facilities available Add notes as necessary for an understanding of the position.
Amount available Amount used $A.000 $A.000 3.1 Loan facilities - -
3.2 Creditstandbyarrangements - -
Estimated cash outflows for next quarter $A.000 4.1 Exploration and evaluation 300
4.2 Development -
Total 300
Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown Current quarter Previous quarter in the consolidated statement ofcash flows) to the related $A.000 $A.000 items in the accounts is as follows.
5.1 Cash on hand and at bank 532 253
- - 5.2 Deposits at call
- - 5.3 Bankoverdraft
- - 5.4 Other (provide details)
Total: cash at end of quarter (item 1.22) 532 253
Changes in interests in mining tenements
Tenement Nature of interest Interest at Interest at reference (note (2)) beginning end of of quarter quarter 6.1 Interests in mining tenements E15/627 100% Nil relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased Nil