Aragon Resources Limited (ASX:AAG) Update On Progress Of Central Murchison Gold Project
Perth, Mar 4, 2011 AEST (ABN Newswire) - Aragon Resources Limited (
ASX:AAG) provide the following update on progress of Central Murchison Gold Project:
I am pleased to provide you with a progress update on Aragon's key project, the Central Murchison Gold Project (CMGP) near the township of Cue, Western Australia.
Our strategic plan is to delineate sufficient mining reserves from the CMGP resource base and develop multiple open pit and underground mines at each of the three historically significant goldfields of Murchison Bell, Cuddingwarra and Day Dawn to sustain gold production of approximately 100,000 ounces per annum with an initial target of an 8 to 10 year mine life.
We have made considerable progress in the exploration and early development studies at the CMGP in the past year, which we believe has added considerably to the Company's value proposition, as evidenced by both a near doubling in share price since the Project acquisition (Jan 2010: ~16c, 1 March 2010: 29c) and the current offer by Westgold Resources Limited (ASX:WGR) for your Aragon shares and options.
The interest in your Company is not surprising.
In the space of the past year, against the backdrop of a record-high gold price environment, Aragon has systematically advanced definition of the Project's value, defining a JORC compliant Mineral Resource of two million ounces, including an initial probable reserve estimate of 614,000 ounces.
The Company is favourably valued in relation to its peers on an enterprise value per resource ounce basis. It also has a strong balance sheet, (A$14 million cash in bank at 31 December 2010, including A$3.3 million in environmental bonds) providing sufficient funding to complete the value definition process and continue feasibility studies for the Project.
Most importantly, Aragon has an attractive portfolio of gold assets, located in one of Australia's proven gold producing regions which has yielded over 5 million ounces of gold.
Since the acquisition of the Cue Gold Project from Harmony/New Hampton in January 2010, Aragon has prudently adopted a systematic approach to the exploration and early development of the CMGP, as demonstrated by the milestones timeline overleaf.
The encouraging drill results announced to the market on 3 February this year, are particularly noteworthy, representing progress towards the aim of defining new, shallow, open-pittable ounces similar to the type of deposits the region has yielded in the past.
Increasing the CMGP's shallow ounce reserve will contribute significantly to the proposed Project economics, particularly during the anticipated pre-production, capital development phase of the two underground operations. Continued, shallow exploration work programs remain a core focus in CY 2011.
Recent progress in advancing the Big Bell (underground) development includes the appointment of environmental management and approvals advisory firm, Outback Ecology; commencement of the second phase geotechnical analysis; a dewatering feasibility study currently underway and ongoing exploration drilling targeting both shallow resources, and an extension of the Big Bell Reserve along strike and to the south.
I look forward to providing further updates as the Project advances.
Westgold Offer
In the interim, an Independent Committee of the Board has been established to guide a response to Westgold's Offer for your Aragon shares and options.
I am joined on the Committee by Aragon Non Executive Directors Mr Brian Thomas and Mr Ben Pollard.
As advised, the independent expert appointed by Aragon, BDO Australia Limited, and independent technical expert, Golder Associates Pty Ltd, are currently in the process of preparing their reports, which we now expect to receive by 14th March.
Aragon is preparing its Target's Statement, which it currently anticipates will be dispatched to shareholders on or about the 22 March 2011.
Shareholders are advised to take no action in relation to Westgold's offer or any document received from Westgold until they receive the Aragon Independent Directors' formal recommendation to be contained in the Target's Statement.
Thank you for your valued support as a shareholder of Aragon, and please visit our website, www.aragonresources.com.au or contact my office on +61-8-9220-5600 for further information.
About Aragon Resources Limited
Aragon Resources Limited (ASX:AAG) is an Australia-based gold, nickel and phosphate exploration company. The principal activity of the Company is the exploration of minerals. Aragon has exploration tenements in Western Australia and the Northern Territory.
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