Gold Mines of Sardinia Limited

A.C.N. 009 234 851

31 Jan 2000
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January 31, 2000

NEWS RELEASE

Improved Results from Fuertei

New Exploration and development

Company intends to move to London Official List and to be listed in Milan

San Martino Litigation

Improved Results.

The Gold Mines of Sardinia Quarterly Report shows further extensions to the oxide ore resource at Furtei, which is still producing strongly nearly a year after the exhaustion date indicated by the initial feasibility study. Gold production for the quarter at 5,652 Tr. Oz. is above budget and the cash operating Surplus for the Quarter is US$69 per ounce.

Recent drilling at Furtei has produced intercepts including 13 metres at 5.29 grams of gold per tonne, 9m at 8.39g/t and 7.5m at 5.16g/t. These are part of significant extensions to a shallow oxide resource at Fuertei.

Development.

Test-work has been commissioned in South Africa on a project to recover gold using a "bio-heap-leach" process on the sulphides ore identified at Fuertei.

Chairman, Peter Hambro comments "We are encouraged by the results of work done on similar ores in other parts of the world and expect to have further news for shareholders during the next quarter".

At Osilo, in the north of Sardinia, drilling is due to start on the encouraging Bunnari prospect ahead of the trial mining announced in October.

Corporate changes.

Following the appointment of Peter Hambro, as Executive Chairman, Gold Mines of Sardinia, which is Australian incorporated and is the operator of Italy’s only gold mine, is expanding its presence in European securities markets.

The company, whose subsidiary produces gold at Furtei in the south of Sardinia and has exclusive exploration rights over the whole of Sardinia, says in its December quarter report today that it intends to list in Milan this year and move to the Official List of the London Stock Exchange.

GMS managing director, Mr John Morris, said the company had appointed SG Securities (London) Ltd, a division of Société Générale, as its sponsor, stockbroker and financial adviser to progress the listings.

"The move is intended to reflect the increasing European interest in GMS shares" Mr Morris said.

GMS is already listed on the Alternative Investment Market in London and the Luxembourg Stock Exchange.

San Martino Litigation.

 

 

 

 

The company’s operating subsidiary is in litigation with a local mineral water producer, San Martino s.r.l., which is claiming Aus$21.5 million in consequential damages for accidental interruption to a bottled water source.
The claim is being contested and the Italian lawyers consider that, on the basis of the documentation provided by San Martino to date, there is no likelihood of a claim in this amount being successful.
The local court has granted a provisional injunction against the company and the local authority which prevents further exploration in parts of SGM’s exploration concessions near Osilo.
The company is seeking to get the injunction lifted without delay and in the meantime is not currently suffering financial loss and can continue operations in other areas.

 

Further information

 

John Morris
Gold Mines of Sardinia Limited
Chelsea Professional Centre
3/145 Stirling Highway
Nedlands, WA 6009
Phone: +61 8 9389 7711
Fax: +61 8 9389 7722
e-mail: gms@gmsltd.com.au

 

 

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Last modified: May 01, 2001