Allied Gold Limited: Expansion to Increase Gold Production-Simberi, PNG

Allied Gold Limited (TSX:ALG)(ASE:ALD) reported that the company will incrementally increase gold production to approximately 100,000 ozpa by the December 2011 quarter at its 100%-owned Simberi gold mine in Papua New Guinea through a fully-funded US$32 million expansion of the oxide processing circuit from 2.0 million tonnes per annum (Mtpa) to a name plate 3.5 Mtpa.

The press release is quoted as saying:

Simberi gold production during financial year 2010-11 is expected to be approximately 73,000 ounces at a cash cost of US$700/oz. When operational at 3.5 Mtpa, production will rise to ~100,000 ozpa with cash costs of US$600/oz generating approximately US$50 million per annum of free cash flow at current world gold prices. At 3.5 Mtpa the Simberi oxide circuit will treat ~35 million tonnes at a grade of 1.02 g/t with a process recovery of ~90% producing 1 Moz over approximately 10 years.

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