Allied Gold adds to PNG resources (March 10, 2010)

Allied Gold (ALG-T, ALD-A) has increased measured and indicated resources at its Simberi open pit project in Papua New Guinea by 170%.

The Pigibo and Pigiput deposits now contain measured and indicated resources of 48.1 million tonnes grading 1.38 grams gold per tonne for a total of 2.08 million oz. gold. A cut-off grade of 0.5 gram gold per tonne was used. Most of these ounces come from the Pigiput deposit which has 1.82 million oz. gold.

There are also substantial inferred resources totaling 38.5 million tonnes grading 1 gram gold per tonne for 1.24 million oz. gold and 86.6 million tonnes grading 3.7 grams silver per tonne for 10.3 million oz. silver.

Resources were based on nearly 52,000 metres of drilling.

Allied Gold constructed a 2.2 million tonne-per-year processing plant at the Simberi project and had its first gold pour in early 2008. The company currently produces about 80,000 oz. gold per year but expects to add another 20,000 oz. of production by expanding the Simberi oxide plant to a capacity of 3 million tonnes per year by the end of 2010.

Of the 48.1-million-tonne resource, sulphide ore amounts to about 33.8 million tonnes grading 1.49 grams gold for 1.62 million oz.

Because much of Allied’s resources are within sulphide ore, the company is now working on a study to build a sulphide plant. The company says production could increase by another 100,000 oz. per year by 2012.

Allied Gold is currently drilling to test the dip at Pigibo and the open northeastern side of Pigiput. The company has drilled about 4,300 metres since the resource estimate was completed.

The company also recently acquired Australian Solomons Gold and its Gold Ridge project in the Solomon Islands. Allied aims to bring this project into production by 2012, bringing production up to 300,000 oz. gold per year.