BUILDING A PROFITABLE
MID-TIER GOLD MINING BUSINESS

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QUARTERLY REPORT April – June 2009

QUARTERLY REPORT April – June 2009

Key Points

  • Quarterly gold production increases by 33% to 13,122 oz
  • Kangaroo Flat Mine grade averages 9.1 g/t gold
  • Cash balance increases by $7 million to $57 million
  • Henty Gold Mine acquired

Summary

Rod Hanson, Managing Director & CEO comment: "Record quarterly production was achieved from strong performance at our Kangaroo Flat Mine. The careful and flexible operating strategy which we have pursued is proving to be very successful at Bendigo. The strong gold price and higher level of gold production generated net cashflow in the quarter of $7 million and increased our cash in bank to $57 million.

"Production from October 2008 has generated positive cashflow of just over $14 million, with the majority in the past six months. This is a strong result considering that reported cashflow is net of all capital, exploration and head office expenses.

"The Henty Gold Mine was acquired just after the end of the quarter from Barrick Gold, and I believe that this acquisition will be a turning point for the Company. We now have two quality gold operations which are generating positive cashflow and both possessing excellent exploration potential in well-endowed and unique goldfields. We will be investing significantly in the future of both operations to ensure we maximise the opportunities we have available to us” said Mr Hanson.

Operations

  • Ore treated of 48,507 t at 9.1 g/t gold for production of 13,122 oz gold at a cash operating cost of A$639/oz (9884 oz gold were produced in the March 09 qtr).
  • The majority of the ore was sourced from Gill reef, with the remainder from Dale, Garrard and Dean reefs, as well as low grade stocks. Gold grades across individual mining blocks varied during the quarter from 5.5 g/t to 13.6 g/t gold, averaging 9.1 g/t gold.
  • Tonnes treated increased by 20% on last quarter reflecting improved operating efficiencies and increased operating time for the June quarter.

Corporate

  • Gold sales generated revenue of $14.3 million during the quarter from the sale of 11,807 oz gold at an average price of A$1212/oz.
  • Cash in bank at 30 June 2009 was $57.1 million (cash at 31 March 2009 was $50 million). Over nine months since October 2008, the cash balance has increased by $14.3 million due to the positive cashflow from operations.
  • On 10 July 2009, the Company announced it had completed the acquisition of the Henty Gold Mine in North West Tasmania from a subsidiary of Barrick (PD) ustralia Limited. The consideration was $5 million in cash, $3 million in Bendigo ordinary shares and a royalty payable on production from future exploration discoveries, capped at $22 million.