as we all know gold never quite made the US$400(but went close)CMX has good support at 5c & looks like heading higher. Read below.
CLIMAX MINING LIMITED 2003-04-30 ASX-SIGNAL-G
HOMEX - Sydney
+++++++++++++++++++++++++ QUARTERLY REPORT
FOR THE PERIOD ENDING 31 MARCH 2003
CORPORATE
On 16 April 2003, Climax appointed Jim Askew as Managing Director and Rob Thomson as Chief Operating Officer. Mr Askew is an internationally experienced mining engineer, company director and CEO. Since 1986 he has been the CEO of the following North American and Australian companies: Golden Shamrock Mines Ltd (ASX and TSE listed), International Mining & Finance Corporation, Rayrock Resources Inc (TSE listed), Golden Star Resources Inc (AMEX and TSE listed) and Black Range Minerals Ltd (ASX listed). Mr Thomson has had immediate past experience as Project Manager for the Chatree (Kingsgate Consolidated NL) mine in Thailand and the Sepon gold project (Oxiana Resources NL) in Laos, both very successful projects.
These appointments were the result of a recent strategic review of Climaxs Didipio gold/copper project in the Philippines and the Companys desire to pursue the resulting development option.
Drawing on the experience of the very successful Chatree and Sepon mines developed by the small listed Australian companies, Kingsgate Consolidated Ltd and Oxiana Resources Ltd in Thailand and Laos respectively, Climax has identified, at Didipio excellent potential to develop an economically attractive, technically simple, operation of 2 million tonnes per annum, to produce some 100,000 ounces of gold and 15,000 tonnes of copper in concentrate annually. The appointments of Mr Askew as Managing Director and Mr Thomson as Chief Operating Officer were made to enable execution of this proposal.
Mr Askew and Mr Thomson have shown their commitment to the success of the Company by taking up a placement of four million and two million shares respectively, at 5 cents per share.
In addition, Mr Askew has been granted four million options which can be exercised at 7.5 cents upon realising milestones of Dinkidi financing, commencement of construction and commissioning of the plant. Issues of shares and options to Mr. Askew are subject to the approval of shareholders.
Mr Thomson has been granted two million options on the same terms.
This Miocene alkaline volcano-plutonic complex covers an area of some 16 sq kms and hosts extensive gold and copper mineralisation. Eighteen gold, copper prospects have been identified including the Dinkidi gold, copper resource.
The Didipio Project Development Study was initiated when gold and copper prices were in excess of US$380 per ounce and US$1.00 per pound respectively and was completed in 1996 by Minproc Engineers Limited. The study proposed the mining by open pit of 50 million tonnes of 0.92 g/t gold, 0.47% copper (1.57 g/t gold equivalent, 0.5 g/t gold equivalent cut off) at the rate of five million tonnes per year, concurrently with selective mining of the high grade core below the open pit of 4.5 million tonnes of 3.61 g/t gold, 0.45% copper (4.16 g/t gold equivalent, 2.0 g/t gold equivalent cut off) at a rate of approximately one million tonnes per year.
The Didipio Definitive Feasibility Study (Minproc) was initiated when gold and copper prices were of the order of US$320 per ounce and US$1.00 per pound respectively and was completed in 2000. The study proposed a small open pit, then a two million tonnes per annum block cave development, to mine 17.8 million tonnes of 2.37 g/t gold and 0.67% copper (3.04 g/t gold equivalent, 2.0 g/t equivalent cut off), recovering an estimated 1.28 million ounces of gold and 115,168 tonnes (254 million pounds) of copper. Operating costs were estimated at US$13.80 per tonne of ore treated, and initial capital expenditure of US$138 million. The project was considered to be viable at an average life of mine price of US$325 per ounce gold and US$0.75 per lb copper.
In the second half of 2000 when gold and copper prices were of the order of US$275 per ounce, and $0.80 per lb respectively, Climax had secured the support of two major international groups who proposed to commit US$42.5 million of equity and quasi equity to the Project and had appointed a London-based resource bank to arrange US$90 million in debt. Financing was suspended in early 2001 due to political uncertainties in the Philippines following the removal of President Estrada and metal prices falling below US$260 per ounce gold and US$0.80 per lb copper.
Climax came to the view in 2001 that the size of the project capital expenditure (US$138 million) and the long lead time to production (in excess of 2 years) were significant issues affecting financing at that time.
Consequently in 2001 and 2002 the Company investigated a number of project development concepts to reduce initial capital expenditure to below US$50 million and start up time to one year. These studies initially concentrated on underground development of the high grade core using cut off grades of up to 5.0 g/t gold and in recent times the technologically straight forward open cut methods, as gold has increased to over US$330 per ounce.
Drawing on the experience of the very successful Chatree and Sepon mine developments by small listed Australian companies, Climax has identified at Didipio, excellent potential to develop an economically attractive, technically simple, operation of two million tonnes per annum, to produce some 100,000 ounces of gold and 15,000 tonnes of copper in concentrate annually. A total review of past extensive engineering studies on the project is now planned to evaluate the proposed operation through to Bankable Feasibility status. Results for this will be available in the third quarter 2003.
The Company is considerably encouraged by the recent position taken by the President of the Philippines to publicly support mining, particularly foreign investment in mining, and the positive effect of this on the administration charged with the responsibility to develop the countrys mining industry.
This Miocene alkaline volcano-plutonic complex covers an area of some 50 sq kms and lies about 12 kms to the west of Didipio.
The complex hosts four large areas of gold copper mineralisation associated with quartz monzonite intrusions. The most interesting prospect is Papaya covering a roughly circular area of alteration seven kilometres in diameter. The area was identified through the Companys 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, such as a five metre channel sample at Ubon Creek returning 3.7 g/t gold, 0.1% copper, 0.1% molybdenum.
The Paco property is located on the Surigao Peninsula, 25 kms south of Surigao City, northeastern Mindanao Island adjacent to the exploration permits containing the Anglo American / Philex Gold Boyongan gold copper discovery.
Significant reported drilling results from the adjoining Boyongan discovery include a 365 metre intercept averaging 0.70% copper and 1.9 g/t gold and a 393 metres intercept averaging 1.58% copper and 2.39 g/t gold, which included a 187 metre higher-grade section averaging 2.58% copper and 4.47 g/t gold.
In June 2002, Climax Mining commenced exploration in joint venture with AurionGold Limited which committed to drill 2,000 metres with a minimum expenditure of US$250,000 in this programme and has the right to earn 51% for further expenditure of US$3 million.
Drilling began in October 2002. Five diamond holes for a total of 1519 metres have been drilled. None of the holes penetrated below the volcanic tuffs overlying the target, potentially mineralised basement rocks.
AurionGold Limited has been acquired by Placer Development Group. In January, Placer informed Climax Mining that it would not continue the joint venture participation beyond the current drilling. Climax is seeking a replacement joint venture partner.
Operator: Cadia Holdings Pty Ltd (Newcrest) earning a 51% interest Newcrest Mining Ltd will earn a 51% interest in the Junction Reefs project for expenditure of $14 million. Expenditure to 31 March 2003 was $7 million. Exploration expenditure for 2003 is expected to be approximately $3.5 million.
Newcrest Mining Ltd continued its aggressive exploration of the Companys Junction Reefs property in NSW which is adjacent to their Cadia and Ridgeway gold, copper mining operations.
GOOLEYS PROSPECTS
This prospect lies east of Cadia and is a focus of exploration. Thirteen (13) deep core holes (of the order of 1000 metres each hole) have been completed. Results from the most recent hole, NJC032 are awaited.
Long intercepts of low grade gold, copper mineralisation similar to that found in the halo surrounding Ridgeway have been intersected in altered volcanics. Assay results have been received for holes up to NJC029 and indicate that the Gooleys North alteration system is relatively more anomalous in gold than the Gooleys prospect area.
Hole NJC027, drilled in the old Little Jessica mine vicinity, west of Gooleys, was completed at 1041.9 metres. Assay results are considered encouraging in that they show that the Little Jessica area has an alteration system. It extends the known area of alteration at least one kilometre west from Gooleys.
RANDALLS
Hole NJC035 tested possible extensions under old gold workings. Results are awaited. Results from NJC028 showed gold values up to 1.0 grams per tonne from 434 metres.
WILLOW PARK
The first hole on this prospect, NJC033 was completed at 831.2metres to test a magnetic high within a circular magnetic low. Although there is intense pervasive alteration, there is no apparent gold/copper mineralisation in the hole. Analyses are awaited.
