TROY RESOURCES NL

28 October 2009

 

QUARTERLY REPORT FOR THE THIRD QUARTER ENDING 30 SEPTEMBER 2009

 

 

HIGHLIGHTS

 

OVERVIEW

 

·         32% increase in the contained equivalent gold (to 602,500 eq Au oz) in the Casposo Indicated Resource.

·         47% decrease in the pre-production capital cost for the Casposo gold silver project in Argentina to US$45 million.

·         Relocation of the majority of the gold processing plant from storage in Cobar NSW to the port of Newcastle NSW in preparation for shipment to Argentina.

·         Commencement of earth and civil works of the Casposo processing facility.

·         Although early in the project construction schedule, the Casposo project is within budget and remains on target for first production in the September quarter of 2010.

·         Quarterly gold production of 17,114oz, a 15% increase over the previous quarter.

·         Cash, bank deposits and bullion of over A$19 million.

·         EGM to be convened on 16 November 2009, to consider Board composition resolutions tabled by Warrigal Ltd.

·         AGM date set for 27 November 2009.

 

 

OPERATIONS

 

Andorinhas

 

·         The plant treated 49,398 tonnes of underground Mamão ore for two and a half months and 9,293 tonnes of Lagoa Seca stockpiled ore for two weeks.

·         Underground development at Mamão is ahead of schedule to open new production faces for ore production.

·         17% increase in gold production over the June quarter to 10,171oz at a unit cash cost of US$508/oz.

 

Sandstone

 

·         Mill fed from new Lord Nelson pit cutback.

·         Production of 6,943 oz gold, 12.8% more than the June quarter, at a unit cash cost of A$943/oz.

·         On track to produce 30,000oz of gold in 2010 financial year.

 

 

PROJECT DEVELOPMENT

 

Casposo

 

·         Relocation of the majority of the gold processing plant components from storage in Cobar NSW to the port of Newcastle NSW in preparation for shipment to Argentina.

·         Expected to depart Newcastle on November 9 arriving in Argentina around December 10 and delivered to site before the end of December.

·         Commencement of earth and civil works of the Casposo processing facility.

·         Although early in the project construction schedule, the Casposo project is within budget and remains on target for first production in the September quarter of 2010.

 

 

EXPLORATION

 

Argentina - Casposo

 

·         Updated Indicated Mineral Resource of 2,369,000t grading 5.4g/t (grams per tonne) gold and 201.7g/t silver for 602,500 Au_eq (gold-equivalent) contained ounces. Indicated Resource increased by 147,600oz Au_eq consisting of 76,400oz gold and 6.3Moz silver.

 

Australia - Sandstone

 

·         Resource Estimate of the tonalite hosted gold mineralisation was completed. This new Inferred Resource (at a 0.5g/t gold cut-off) is 10,541,000t at 1.3g/t gold for 452,000oz gold.

 

Brazil – Andorinhas

 

·         At Coruja Northeast RC drilling produced: BBR069 3m at 7.94g/t gold from 16m in quartz veins with iron oxides hosted within metabasalt saprolite and BBC220 3m grading 4.86g/t gold from 41m close to the saprolite – fresh rock interface. The gold mineralisation is associated with pyrite bearing quartz veins hosted within deformed, biotite altered metabasalt and laminated banded iron formation (magnetite rich rock - BIF). Infill drilling is planned.

 

 

COMMENTARY

 

Commenting on the quarter, Troy CEO Paul Benson said, “The highlight of the quarter has been the pleasing progress at the Casposo project where we announced a 32% increase in the Indicated Resources and a 47% reduction in pre-production capital. Site civil and earthworks have commenced and the gold plant we have held in storage is being readied for shipment to Argentina in early November. Although still early days, we remain on budget and expect first production in the September quarter of 2010.

 

On the operations front this has been another solid quarter. Andorinhas is transitioning to the higher grade, underground Mamão ore and we expect the grade to increase through 2010. At Sandstone we have started to process ore from the final cutback of the Lord Nelson pit. As highlighted in the June Quarterly the unit costs at Sandstone have increased due to the overburden removal associated with the final cut back”.