News

February 16, 2009

Allied Gold Exudes Confidence About The Future For Its Simberi Gold Mine, And Its Farm-in With Barrick

By Charles Wyatt

It sounded on the telephone as if Mark Caruso, executive chairman of ASX-listed and Aim-traded Allied Gold, had had a very enjoyable visit to Indaba this year. By the time Minews spoke to him on Friday the conference had just about left town – Cape Town that is – and his only problem was to find a cab to take him to a lunch appointment. Regarding the Simberi gold mine on Simberi Island in the Tabar Islands of Papua New Guinea he had only one comment: “Terrific. Couldn’t be going better”. Allied has been producing gold from this open pit mine since February 2008, and during that time it has reduced its debt to a low level and easily kept to its hedging commitments.

Over and above all this, however, is the fact that most of its costs at Simberi are denominated in Australian dollars. The Aussie dollar is very weak compared to the US dollar at the moment. As of today the Aussie dollar is only worth US$0.66. But because the gold price, which moved significantly higher last week, is denominated in US dollars, in Australia gold is worth a near-record A$1,450 per ounce. This is one of the best things that could happen to an Australian gold miner. “A perfect...