| Tue 14 Jun 2005, 11:47 | | Sub Nigel - Commencement of gold production at Sub |
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Sub Nigel - Commencement of gold production at Sub Nigel after 13 years
SUB NIGEL GOLD MINING COMPANY LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1984/006179/06)
Share code: SBN & ISIN: ZAE000006391
(`Sub Nigel` or `the Company`)
PRESS RELEASE - COMMENCEMENT OF GOLD PRODUCTION AT SUB NIGEL AFTER 13 YEARS
The board of Sub Nigel has the pleasure of informing its shareholders that it
has commenced with small-scale gold production at its Spaarwater Mine, located
on the East Rand, South Africa. The mining operation is the first stage of the
Company`s long-term strategy of establishing a 480,000 ton per annum gold mining
operation at Spaarwater, East Rand South Africa.
After thirteen years of the mine being on care and maintenance, the board
announced on the 6th April 2005 that it had committed the Company to an
expenditure programme of R600, 000 on the surface and underground infrastructure
at the Sub Nigel No 1 shaft complex. The Company has since committed a further
R200,000 on certain safety related devices, bringing the total expenditure at
the No 1 shaft complex to R800,000.
Following a two (2) month upgrade of these facilities, the work completed
included the licensing of the winder, repairing the surface bin and conveyor
belts, repairing the underground loading bins, repairing where necessary the No1
shaft steelwork, restoring power to the mine and winder, repairing all
conveyances, completing thorough legal testwork on ropes and safety devices,
repairing the 17 and 19 level underground stations, repairing underground
rolling stock and locomotives, restoring power to 17 level, repairing change
houses and main office blocks and re-establishing all stores and other support
related systems to the mine.
The Company has produced its first gold bearing ore from surface gold resources
at a head grade exceeding 10 grams per ton. This gold bearing ore is currently
being treated at the Petrex gold processing facility, owned by the Canadian
company, Bema Gold. At the current gold price of R93,000 per kilogram, the
Company expects to generate a reasonable profit from its first month`s
production which should repay the initial capital outlay, in the mine`s maiden
month of production.
The Company is delighted with the performance as well as with the performance of
its very experienced operational team running the mine.
The board would like to caution shareholders that production, grade and profit
will tend to be erratic over the short term as management sets its medium and
long term mine plan objectives and goals. Shareholders are further advised that
the Company anticipates a life of mine head grade from underground resources of
5.7 grams per ton.
The Company expects to announce its first gold pour of approximately 8 kilograms
of gold for June at the end of the month, after a decade of non-production by
Sub Nigel Gold Mining Company Limited.
END
Date: 14/06/2005 11:35:04 AM
Produced by the JSE SENS Department
