October 28, 2016

Tomingley Gold Operations (TGO) 

Persistent heavy rain during the quarter (394mm) dramatically impacted production by delaying ore releases, particularly at the base of the Wyoming One starter pit.

Importantly mine schedules have been adjusted accordingly with full year guidance for FY2017 production remaining unchanged at 65,000 – 72,000 ounces. The cost impact is under review and will be reported at the end of the December quarter.

Quarter Results:

  • Gold production 10,435 ounces
  • Site operating cash costs were A$1841/ounce and total operating costs (AISC) of A$2,139/ounce
  • Gold sales 10,000 ounces for revenue of A$16.3 million at an average price of A$1,627/ounce
  • Gold forward contracts at 30 September 2016 of 54,900 ounces at average forward price of A$1,704/ounce. 

Site net operating cash flow after development costs for the quarter was negative $4.9 million, the second time since production ramped up in May 2014 that a negative result was recorded.

Revised Resource and Reserve Statements were issued on 22 September 2016.

Resource/Reserve development drilling on site has commenced and regional target expansion drilling is planned for the December quarter.

Dubbo Zirconia Project (DZP or the Project)

AZL signed an exclusive worldwide marketing, sales and distribution agreement with UK based Minchem Ltd for all zirconium materials produced by the DZP. Minchem is a technical ceramics marketing and manufacturing business that has been involved in zirconium chemicals and zirconium dioxide (ZrO2 or zirconia) products for over 40 years.

A major demonstration pilot plant run was completed providing zirconium, hafnium and rare earth product samples for further customer evaluation.

The Due Diligence review of Vietnam Rare Earth JSC (VTRE) has commenced.

MOU for product offtake and supply of process equipment with Siemens Ltd advised in a separate ASX release on 25 October 2016.

Corporate

The Group’s cash position totalled A$28.3M with A$22.5M cash and bullion on hand valued at A$5.8M, a decrease of A$1.5M from the previous quarter.

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