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Gympie Gold Update

ASX Announcement & Media Release

14 June 2001

Gympie Gold Limited is pleased to provide the following update on progress in relation to its three businesses - coal, gold and gold gemstone.

Strategically, all three businesses are seen as long term assets of the company, with the potential to produce significant value and returns for shareholders.

SOUTHLAND COAL

Southland Coal production under new operator Thiess has commenced as planned at the rate of approximately 1.5 million tonnes per annum from early May. Production for the 10 m onths to 30 April was 220,000 tonnes and for the two months to 30 June is expected to exceed this, based on results to date.

During May development ahead of the longwall production unit has been expanded from one “continuous miner” development machine to three. The plan is to sufficiently develop coal ahead of the initial production panels to facilitate 2.4 million tonnes per annum as from the third year.

New site management has been installed, a new Enterprise Agreement signed and the permanent workforce largely recruited.

New customers have been added in Brazil and Korea assisting diversification beyond the existing long-standing steel-mill customer-base in Japan. Product selling prices in $US have risen more than 20% beyond those prevailing to 31 March 2001.

Southland Coal’s products compare very favourably with other hard, semi-hard and semi-soft coking coals. Southland Premium Coking has the lowest ash and highest fluidity of any Australian coking coal.

Further information is provided in other recent ASX & Media Releases in respect of this business.

GOLD

The following information updates that reported in the Quarterly Report dated 9 April 2001.

Monkland Mine has produced in the 11 months to end May, a total cash operating margin of approximately $9 million ($A214/oz), from production of approximately 39,000 ounces of gold excluding gemstone.

Exploration success in the Monkland Mine has identified sufficient high-grade reserves and resources to underpin +3 year’s production at approximately 10 g/t grade, mainly from mineralisation associated with Stockwork Zone 6. Targets and resources for later years have already been identified.

A new drill result on the Inglewood Lode from diamond drillhole N13 has extended its ore envelope 40 metres along strike further north than previously assumed for resource-estimation purposes.

Table 1: Monkland Mine Drill Results

Hole

From
(m)

To
(m)

Length
(m)

Grade
(g/t Au)

Notes

N13

31.1

33.8

2.7

11.9

Inglewood

The new Lewis Mine decline development accessed the main gold orebody, the Inglewood Lode in May, a month ahead of plan. Exploration has also discovered two stockwork-style structures, Rands Stockwork and Stockwork Zone 7 in close proximity to the Lewis Mine decline. Figure 1 shows a plan of the Lewis Mine and Figure 2 shows a section view of both the Lewis Mine and the deeper Monkland Mine.

Figure 1: Lewis Mine Area in Plan View. Major Structures Shown

001.gif

Figure 2: Lewis & Monkland Mines In Section View

002.gif

Lewis Mine: Inglewood Lode

Where exposed in limited development to date, the Inglewood Lode is about 2 metres wide. Table 1 shows results from holes drilled at 25 metre centres ahead of the current development drive which indicate a high grade mining block. The tenor of the drill results is similar to that of the S1 block in the Monkland Mine which is above 10 g/t grade. The abundance of visible gold is also higher than normally observed in the Inglewood Lode.

Table 2: Lewis Mine Drill Results: Inglewood Lode

Hole

From
(m)

To
(m)

Length
(m)

Grade
(g/t Au)

Notes

A23

52.1

52.5

0.40

31.0


A24

45.1

45.6

0.5

0.40


A25

30.6

31.6

1.0

9.20

Gympie Vein

A25

31.6

35.0

3.4

1.50

Visible gold

A26

54.7

55.7

1.0

4.00

Visible gold

A27

36.8

40.1

3.3

0.80

Visible gold

A28

29.1

33.1

4.0

6.20

Visible gold

A29

25.7

26.0

0.3

37.1

Visible gold

A30

30.3

32.5

2.2

12.5


A31

32.3

32.7

0.4

14.6


A36

56.5

57.7

1.2

40.5

Visible gold

A36

65.0

67.9

2.9

2.40


A37

51.3

52.8

1.5

2.00


A38

51.7

52.8

1.1

147.0

Visible gold

A40

51.9

53.5

1.6

36.2

Visible gold

Note: Holes A32 to A35 & A39 were drilled into old stopes above and south of development.

Lewis Mine: Rands Stockwork

The Rands Stockwork discovery was announced on 12 March 2001. It is a wide
stockwork zone located 30 metres above and 65 metres north of the Lewis
decline.

Potential ore widths of 10 to 25 metres and grades of 4 to 12 g/t are typical to date.

Table 3: Lewis Mine Drill Results: Rands Stockwork

Hole

From
(m)

To
(m)

Length
(m)

Grade
(g/t Au)

Notes

A04

330.0

382.0

52.0

3.1

Full width

Including

330.0

348.0

18.0

7.2

Rands

A22

44.0

45.5

1.5

12.0


G116

137.0

155.1

18.1

4.3

Partly mined

A42

131.0

133.0

2.0

6.6

Stope fill

Lewis Mine: Stockwork Zone 7

Stockwork Zone 7 was recently intersected in three drillholes only 15 metres above and north of the Lewis Mine decline and some 85 metres east of the Rands

Stockwork. The intercepts have been 4 to 8 metres wide and contained multiple narrow quartz veins with coarse visible gold within a strongly carbonaceous sedimentary rock. Based on mining experience to date at Gympie, initial assays appear to understate the strength of this mineralisation. This zone is being further tested.

Table 4: Lewis Mine Drill Results: Stockwork 7

Hole

From
(m)

To
(m)

Length
(m)

Grade
(g/t Au)

Notes

A41

35.65

39.00

4.45

8.7

Some visible gold. Edge of stockwork

A42

23.50

26.00

2.50

2.2

‘’

A43

19.70

25.10

6.40

4.8*

Strong visible gold*

Note: Drill core from diamond drillhole A43 contained coarse visible gold at 20.5m, 22m & 23.2m depths but the assays do not reflect this. The intercept in hole A43 is considered a strong zone of stockwork mineralisation. Further drilling on this target is planned.

Lewis Mine: High Grade Gympie Vein Discovered

Two holes have intersected a Gympie Vein, which appears to be a southern extension of the historic No.1 West Reef. A strike length of at least 240 metres of this Gympie Vein remains unmined between the Inglewood Lode (see Figure 1)and the historical No. 1 West Reef workings.

Table 5: Lewis Mine: No. 1 West Reef Drill Results

Hole

From
(m)

To
(m)

Length
(m)

Grade
(g/t Au)

Notes

G119

277.6

279.5

1.9

4.10

170m north of Inglewood Lode

G120

268.0

269.0

1.0

11.5

240m north of Inglewood Lode

GYMPIE GOLD GEMSTONE

In the past year Gympie Gold has been developing an international gold gemstone business based on quartz stone with extraordinarily rich veinlets of visible gold found in “the jewellers’ shops” zones which have been historically a feature of the Gympie mines.

Gympie Gold is not aware of any other gold producer in the world which takes a highly value-added mine product through to consumer markets.

The products launched at this month’s USA Jewellery Trade Fair in Las Vegas have already triggered sales orders exceeding $150,000, our best month to date since launching internationally one year ago.

Success to date will be reinforced by expanding marketing programs. Growing international brand awareness of Gympie Gold is encouraging.

GYMPIE GOLD LIMITED (GYM) - CORPORATE

UK Stock Exchange Listing, on AIM Board

The Board today resolved to proceed with the application to list Gympie Gold’s securities on the AIM Board of the London Stock Exchange. The listing is planned for the last quarter of calendar 2001, after release of audited results for the year ending 30 June 2001. We have engaged Nabarro Wells as Nominated Adviser to the listing and the Company’s UK share registry is already operational via Computershare UK.

Appointment of Non-Executive Director

Dr Chris Rawlings, formerly Chief Executive Officer of QCT Resources Limited, has joined the Board of Directors. Dr Rawlings brings over 20 years of coal industry experience to the Company.

ASX-Listed Options exerciseable at 80 cents per share by 30 June 2001

Option holders should have by now received from the Company a formal notice summarising the terms of these securities and providing other relevant information.


Full details can be obtained in the following downloadable files:

  • ASX Announcement & Media Release [ pdf ]


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