Gold Mines of Sardinia Limited

A.C.N. 009 234 851

31 Oct 2000
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Gold Mines of Sardinia Reports Third Quarter Results For 2000

Gold production at Furtei 5,677oz, above budget. Oxide resource continues to produce gold at above modelled rates
SGM to appeal national government veto of regional approvals for trial mine and Bunnari deep drilling at Osilo
High-grade gold and copper drill intercepts from Su Coru (Furtei) augment resources, coupled with significant new discoveries of silica sinter and veins at Scano Monti Ferru
New discovery of epithermal mineralisation at Siliqua
Total mine cash operating costs reduced by 43 per cent, cash operating margin US$146

Perth/London, 31 October 2000

Gold Mines of Sardinia today announced operating results for third quarter 2000 (ended 30 September). Exploration at Furtei is yielding promising results, while site yields remain above target.

Peter Hambro, Executive Chairman, commented:

"With the US$ gold price so firmly in the doldrums, in spite of the turmoil in so many other markets, it is a pleasure to be one of the few gold mining companies operating in the €uro zone. The €uro gold price has held up well against our €uro denominated costs. It is cold comfort, but Chancellor Brown’s decision to exchange the UK’s precious gold reserves for the weak €uro looks more inept by the day.

We have continued to find, and produce from, new oxide deposits at Furtei – in spite of initial predictions that we would already have run out – and this has been a much happier quarter for the company from a production point of view with higher than expected production levels and substantially lower cash operating costs.

Exploration continues at a number of sites on the island and has shown some marked success. I am well pleased with the results of the drill intercepts at Furtei and the recent re-evaluation of the data on the Scano Monte Ferru discovery is most encouraging. Also, the fifty-metre intercept of epithermal mineralisation at Siliqua could prove significant and I look forward to receiving the assay results. We look forward working with Homestake’s geologists on these new developments in the very near future.

Scaled-up trials of bio-leaching on the sulphide ores at Furtei continue to be encouraging and the 12 week trial period has shown that the bacteria can reach well into, and oxidise, run-of-mine ore on the trial pads. The next step will be to crush and treat this material to test the recoverability of gold.

The value of the company’s investment in Navan Mining, almost doubling in value, has benefited from speculative interest but I have maintained my policy of not commenting on market rumours. Navan’s recently announced gold find in Bulgaria is very welcome and GMS

geologists, who were on-site some time ago, are very impressed by the possibilities that this offers.

Indications are that the potential for Platinum group metals is not significant and the previously announced Soprintendenza’s injunction against our Osilo operations was as unexpected as it was unwelcome. This decision is under appeal and the result is expected within a month to six weeks. Our legal advisers remain confident of a satisfactory outcome.

Plans to move GMS to Europe are progressing and we hope shortly to be able to announce proposals to move the domicile of the group holding company from Australia to the UK."

- Ends -

For further information, please contact:

Gold Mines of Sardinia

Edelman Public Relations

John Morris

Matt Morrell

Chelsea Professional Centre

Haymarket House

3/145 Stirling Highway

28/29 Haymarket

Nedlands, WA 6009

London SW1Y 4SP

Phone: +61 8 9389 7711

Phone: +44 207 344 1202

email: gms@gmsltd.com.au

email: mmorrell@edeluk.com

   
 

Antonio Buozzi

 

Via Telesio 25

 

20145 Milan

 

Phone: +39 2 467141

 

email: antonio_buozzi@edelman.com

 

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