Gold Mines of Sardinia Limited

A.C.N. 009 234 851

30 April 2001
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30 April 2001

FURTEI SULPHIDE PLANT COMMISSIONING

Gold Mines of Sardinia has begun commissioning the new $1 million sulphide ore flotation plant at the Furtei mine in the south of the island.

The plant is expected to be fully operational by May 2001.The plant is capable of producing 15,000 tonnes a year of concentrate containing about 70 grams per tonne (g/t) gold and 20 per cent copper.

Completion of the plant is highlighted in the companyís March quarter report lodged with the London and Australian Stock Exchanges today.

Other highlights include:

Exploration results at the Monte Ollasteddu discovery announced in January confirm the bulk tonnage potential of the prospect.

Regulatory authorities have cleared the Osilo trial mine project in the north of the island to go ahead.

"These three events mark significant turning points for Gold Mines of Sardinia," managing director Mr John Morris said. "Despite continuing weakness in the gold market, we are able to extend the life of the Furtei project while at the same time embark on a new development.

"Monte Ollasteddu, however, represents a huge step forward in realising our vision of proving Sardinia as a major gold and base metals province in Europe. Itís early in the exploration program yet but the results our geologists report are truly exciting."

Mr Morris said the company was well placed to capitalise on these developments.

"We enjoy one of the strongest liquidity positions among mining companies of our size - about A$30 million in cash, negotiable securities and government grants received or in process," he said.

Monte Ollastedu rock chip channel results within a soil anomaly 3.5km long and 1km wide include gold intercepts of 27m @ 4.69g/t, 23m @ 3.56g/t and 20m @ 2.63g/t.

At Furtei, "probable" estimates of sulphide ore reserves stand at 256,600 tonnes, grading an average 4.8g/t gold and 0.5 per cent copper. Continued exploration of the Furtei mining area will add to reserves, in the same way that mining of the oxide ore resource has now extended two years beyond original estimates.

About 80,000 tonnes of sulphide ore are stockpiled ready for the flotation plant.

At Osilo, current resources are sufficient to plan a five-year project producing up to 50,000 ounces of gold a year.

 

Further information: John Morris

Managing Director

+61 8 9389 7711

www.gmsltd.com.au

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Last modified: May 01, 2001