CGA announces record quarterly gold production and plant throughput

PERTH, Western Australia, July 31, 2012 /CNW/ -

MASBATE GOLD PROJECT UPDATE

Processing

The process plant throughput increased 9% to 1,728,751 tonnes at 1.05g/t (March Qtr 1,586,549 tonnes at 1.12g/t) which is a new quarterly throughput record.

Gold production increased 3% to a new quarterly record of 50,817 oz (March Qtr 49,199 oz) at a recovery of 83.3% (March Qtr 86.4%). The movement in the recovery % was affected primarily by decreased residence time.

Plant availability remained good at 93.4% (March Qtr 94.1%) with all areas of the plant performing well.  The SAG mill continued to operate trouble free since recommissioning on 25 December with average throughput rates for the quarter of 6.9mtpa.

Cash costs rose slightly to $784/oz (March Qtr $753/oz). This is mainly attributable to reduced feed grade to the mill.

Cash costs per tonne milled continued to fall to $22.76 compared to $23.24 in the March quarter.

The gross project operating cash flow before working capital for the quarter was US$28.758M (March quarter was US$29.896M) from gross gold proceeds of sale of US$65.915M.

Safety

There were no Lost Time Injuries in the quarter with the site achieving 398 days without a lost time injury to result in an LTI Frequency rate of 0.

Mining and Geology

Mine production eased 7% to 2,370,565 BCM (March Qtr 2,547,823 BCM) to produce 1,599,837 tonnes of ore (March Qtr 1,611,639 tonnes) from Colorado, Binstar, HMB East and Main Vein pits. Main Vein and Colorado pits were the major sources of ore as Binstar pit, which has provided the majority of ore this year, will be completed in the September quarter.

Optimisation Study

The Lycopodium Optimisation Study to determine the options for upgrading plant capacity via stepped increases in capital expenditure nears completion with capital and operating estimates under final consultant review.

Exploration and Near Mine Resource DrillingSummary

Drilling this quarter was split between the Mining Lease area targeting resource infill and upgrade at Panique,  Main Vein, Libra East, Libra West, Montana, HMBNW, and  Colorado. Similar drilling was conducted at Blue Quartz and Old Lady prospects within EP -010-2010-V, and 3 exploration holes drilled to test a Cu - Au porphyry target at the Baleno Copper prospect.  A total of 12,285m of reverse circulation ("RC"), 6,847m of diamond core, and 2,415m of RC / core tail drilling were completed.

The best results for the quarter were returned from Libra East where infill drilling has extended the mineralisation below the planned pit floor. HMBNW and Main Vein North Split holes also returned encouraging results.

Regional mapping and sampling continued this quarter completing coverage of the southern extent of EP-010-2010-V (EP10). Results received from this program have identified another anomalous drainage not associated with previously mapped veins or workings.

At the Baleno Cu / Au porphyry prospect, an IP survey was completed during the quarter and produced a number of chargeable anomalies. Drill testing commenced and minor copper mineralisation was noted in the core from two of the holes completed.

Drilling Statistics for June Quarter 2012

Drilling Activities

At Blue Quartz, drilling concentrated on the untested "north splay" with 23 holes, 2556m, completed.  The first results from this program are very encouraging with intersections up to 10m and grades in the 2 - 5 g/t Au range. Results were received for holes completed last quarter in the Blue Quartz Link Zone between Blue Quartz and Old Lady prospects. This area is low lying with no outcrop. Results indicate the mineralised structure is continuous however the grade and widths of mineralisation intersected so far are of lower tenor than Blue Quartz or Old Lady. There is some indication the structure may be offset to the north and further drilling is planned to test this possibility. Drilling also commenced on a 20 hole infill and depth extension program designed to test the down dip extent of the main Blue Quartz mineralisation. So far 9 holes have been completed in this program (no assay results received). In the next quarter the infill program will be completed and a further 8 holes (960m) are planned to test a parallel resistivity anomaly that lies 100m to the NE of the Blue Quartz trend.

At Main Vein North Split diamond core drilling has continued this quarter with 7 holes completed (2268m). Drilling concentrated on the structurally complex western end of the Doris vein where it converges with the Libra East Vein (no results from these holes). Results were received for MV019 which successfully intersected the Main Vein North Split structure (53m @ 1.28 g/t Au from 204m). A further 24 holes, 13,596m, are planned to test the depth extents of the North Split mineralisation below the current pit floor.

Results were received for the last 8 holes in the Binstar Deeps drill program. Drilling here targeted the Star and Binstar Footwall Split veins with a series of holes drilled from the eastern margin of the Binstar Pit to test for extensions of the mineralisation below the planned pit floor. These holes intersected near surface mineralisation within the current pit design. Previous holes in this program successfully delineated additional mineralisation below the planned pit floor in the central Binstar pit area.

At Libra East the current 39 hole program (10,161m) was designed to test the depth extent of the mineralisation and the eastern end of the system. This quarter 18 holes were drilled (4621m). The holes were a combination of RC, RC with diamond tail, and fully diamond cored. Results received this quarter confirm the presence of a consistent, wide, high grade vein system extending over 500m strike. This drill out program is planned to be completed next quarter.

At HMBNW a 17 hole program was completed during the quarter with 14 RC holes, 2089m and one core hole, 290.3m. Assay results from the first 3 holes of the program indicate, there is good potential to increase resources here.

At Colorado the current drilling program is designed to infill previous wide spaced drilling, particularly beneath the planned pit floor. This quarter 4 RC holes were completed before drilling was suspended due to drilling equipment issues
Late in the quarter a rig was moved back to Panique to recommence drilling the central and southern extensions of the Panique vein with 5 holes completed for 852m. Results received during the quarter for holes targeting this vein were encouraging with moderate widths and grades up to 12m @ 1.43g/t Au intersected.  Drilling will move south during the next quarter to test the southern extensions of these veins.

Drilling continued at Old Lady prospect this quarter with 8 holes, (1784.4m) completed. A further 9 holes will be drilled to complete this current program targeting the depth extensions of the mineralisation.  Results from a further 14 holes are outstanding so a final indication of the depth potential for this prospect will not be known until next quarter.

At Libra West holes are planned to convert Inferred resources to Indicated along the eastern part of Libra West Vein and below the old pit floor. An extra two holes are designed as exploration holes to test the continuity of the vein structure to the west where there is no drilling to date. During the quarter 11 holes, 1970m were completed. No assay results have been received as yet.

At Montana, 23 holes are planned to convert inferred resources to indicated resources below the old pit. The block model reveals a total of 1,205,970 tonnes at 1.78g/t Au (69,000oz) in the inferred category for this domain. This quarter 8 holes for 1332m were completed. In addition further drilling is planned along strike to the NW into the Vicar tenement. This area has never been drilled and represents an excellent prospect for delineating additional near mine resources.

The Baleno prospect is located 4km to the SE of the mining area and is centred on a small historic open pit containing copper mineralisation hosted in diorite. Work completed during the quarter included completion of an IP / Resistivity survey and drill testing 3 chargeable anomalies (1247.1m). Geological logging has identified minor copper mineralisation. Logging and partial assays for BPDH002 indicate one of the chargeable targets may be a pyritic, carbonaceous sediment.

Regional Mapping & Sampling

The regional mapping team continued working in the south of Exploration Permit area covering all of the remaining area this quarter.  A total of 316 stream and 361 rock chip samples were taken.

In addition to the anomalies reported last quarter, results from -80# stream sampling have identified an anomaly at Bart- Ag East;  a strongly anomalous drainage with multiple anomalous streams draining an area of 1.5 km2 adjacent to the eastern boundary of the exploration lease due east of the Bart - Ag prospect.

Table of Anomalous Intersections

PANIQUE

BINSTAR

LIBRA EAST

HMBNW

COLORADO

OLD LADY

• No top cut
• 0.40 lower cut off
• Maximum 2.0m internal waste
• Minimum diluted grade 0.40
• True widths calculated and presented

CORPORATE

As at 30 June 2012, cash and liquid assets were US$151.4 (March quarter: $153.9M).  Cash and bullion on hand represented US$110.1M of that balance - including the cash reserves of Filminera Resources Corporation while cash and bullion at 31 March was US$99.2M. This was after having paid the interest and principal repayment on the BNP arranged project finance facility for the June quarter of US$4.5M.  The outstanding project finance facility has now reduced to US$27.2M at 30 June 2012 (March quarter: $31.4M).  During the quarter, 50,000 outstanding options due to expire on 30 June 2012 were exercised for total gross proceeds of A$32,500 and 150,000 unexercised out of the money options expired. At 30 June 2012, the Company had 6,471,250 options on issue and the total issued capital was 337,775,726 fully paid ordinary shares.

ABOUT CGA MINING LIMITED

CGA is listed on the main board of the Toronto Stock Exchange and ASX.  The Masbate Gold Project in the Philippines was successfully constructed with first gold poured mid-2009. The project has a total measured and indicated resource base of 5.13M ounces of gold, total inferred resource base of 2.83M ounces of gold and a proven and probable reserve of 3.097M ounces of gold.

The 4Mtpa designed plant was constructed by Leighton Contractors Asia Limited ("Leighton") without one lost time injury. The mining contract for the Masbate Gold Project has been awarded to Leighton, the largest mining contractor in the world. CGA has completed a US$12M investment program designed to upsize throughput to 6.5Mtpa at Masbate. The project is forecast to produce at a rate of over 200,000 ounces per annum (Year ended 30 June 2011: 190,033 ounces).

CGA has an aggressive exploration strategy. It is planned to undertake 100,000m of drilling as part of US$20M expenditure over the next twelve months.

CGA has a disciplined acquisition program focused on acquiring new gold projects with a substantial initial resource with the capacity to grow materially and where the development and operational experience of CGA can be applied to enhance shareholder value.

NATIONAL INSTRUMENT 43-101 AND JORC COMPLIANCE

Mr Mark Turner, BE Min(Hons), M.Aus.I.M.M.CP Man, CGA's Chief Operating Officer, is acting as the Qualified Person in compliance with NI 43-101 and JORC reporting requirements with respect to this announcement. He has prepared and or supervised the preparation of the scientific or technical information in this announcement and confirms compliance with NI43-101 and JORC requirements.

The information in this news release that relates to the 2011 mineral resource estimate is based on information compiled by Mr. Andrew Vigar, who is a Fellow of the Australasian Institute of Mining and Metallurgy.  Mr. Vigar is a full time employee of Mining Associates Limited. Verification of the data included site visit, database validation of historical drill results and review of sampling and assaying protocols. Mr. Vigar has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration to qualify as a Competent Person as defined the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' ("JORC Code") and as a Qualified Person NI 43-101. Mr. Vigar consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

The information in this news release that relates to the 2011 mineral reserve estimate is based on information compiled by Mr. Stephen Jones, who is a Fellow of the Australasian Institute of Mining and Metallurgy.  Mr. Jones is an employee of Golder Associates Pty Ltd. Verification of the data included  site visit, validation of operating procedures and equipment and the ability of the mine site to mine the reserves.  Mr. Jones has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration to qualify as a Competent Person as defined by the JORC Code and as a Qualified Person under NI 43-101. Mr. Jones consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

This announcement includes certain "forward-looking statements" within the meaning of Canadian securities legislation. All statements, other than statements of historical fact, included herein including, without limitation, statements regarding milestones related to the Masbate Gold Project, production estimates and CGA's future operating or financial performance, are forward-looking statements.. Forward-looking statements involve various risks and uncertainties and are based on certain factors and assumptions. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from CGA's expectations include uncertainties related to fluctuations in gold and other commodity prices and currency exchange rates; uncertainties relating to interpretation of drill results and the geology, continuity and grade of mineral deposits; uncertainty of estimates of capital and operating costs, recovery rates, production estimates and estimated economic return; the need for cooperation of government agencies in the development of CGA's mineral projects; the need to obtain additional financing to develop CGA's mineral projects.; the possibility of delay in development programs or in construction projects and uncertainty of meeting anticipated program milestones for CGA's mineral projects ; and other risks and uncertainties disclosed under the heading "Risk Factors" in CGA's Annual Information Form for the year ended 30 June 2011 filed with the Canadian securities regulatory authorities on the SEDAR website at sedar.com. 

SOURCE CGA Mining Limited

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