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Activities Report for the Quarter Ended June 30th 2010
Highlights
Production Focus has completed its second full year of production, generating a record 62,300 ounces at a total cash cost of A$792/oz in the year to June 30, 2010. This is a 52% increase on the previous year’s production of 41,400 ounces. Production during the June Quarter, which comprised just 52
milling days, totalled 164,919 tonnes @ 2.5g/t for 12,660 ounces. This excludes 33 days of toll milling and a six-day maintenance shutdown.
Reserves Focus’ reserves continue to grow, with open pit reserves now at 1,490,000 tonnes @ 1.8g/t and underground reserves growing to 954,000 tonnes @ 3.9g/t for a total combined position of 2,483,000 tonnes for 207,900 ounces in reserves and stocks.
Exploration and Resources
Focus reached a key milestone in its development during the quarter, with its resource base climbing above two million ounces for the first time. Highlights of the resource growth include an increase of the underground resources at the Tindals Mining Centre to 2.04Mt @ 4.9g/t for 324,000oz following an 80% increase in the Cyanide resource to 117,800oz @ 5.5g/t.
An updated resource for the Empress Alicia Deposit now stands at 849,000t @ 2.00g/t for 54,500 ounces, including an indicated resource of 620,000t @ 2g/t for approximately 39,700 ounces and an inferred resource of 229,000t @ 2g/t for approximately 14,700 ounces.
Promising drilling results from new electromagnetic targets point to a new discovery north of Perseverance (Tindals), with hits including:
o 4.6m @ 5.9g/t Au
o 5.2m @ 3.6g/t Au
o 4.2m @ 3.6g/t Au
A large modelling and targeting exercise in the well endowed Lindsays / Bayleys area was completed and has revealed potential for numerous large, undiscovered ore bodies within Focus’s Coolgardie land holding. Initial drilling in the area has commenced with immediate exciting results, including:
o 3.0m @ 7.02g/t Au
o 2.1m @ 6.65g/t Au
o 5.0m @ 4.76g/t Au
o 10.6m @ 2.69g/t Au
o 17m @ 2.56g/t Au
Highlights Continued
Business Development & Organic Growth
During the quarter, Focus acquired a 75% interest in the Lake Cowan gold-copper project (Treasure Island), south of Kambalda. This sits on the southern extension of the famous Boulder-Lefroy fault system. Initial sampling from Treasure Island has returned outstanding copper grades including 8.53% Cu, 2.87% Cu and 1.51% Cu as well as anomalous gold, silver and nickel results.
Corporate
At the end of the quarter Focus had $10.2 million cash and bullion on hand.
PRODUCTION
Production for the 2010 financial year was 62,296 ounces, representing an increase of 52% on the 2009 financial year. Production for the quarter was 12,660 ounces. All of this came from the Three Mile Hill Mill, which treated 164,919 tonnes at an average head grade of 2.52g/t. Gold sales revenue for the Quarter was A$17.19 million from the sale of 13,080 ounces of gold at an average price of A$1,314/oz.
With 33 days of milling capacity allocated to toll treating La Mancha ore and a six-day shutdown to complete a mill reline and other scheduled maintenance items, mill availability was reduced to a net total of 52 days during the quarter. As a direct result, total quarterly cash costs were A$1,034 per ounce based on reduced gold production. A normalised cash cost for the quarter based on full mill availability would be approximately A$750/oz.
# Cash operating cost refers to the cost of refined gold and includes all expenditures directly incurred on mining, crushing and processing including
site administration cost including royalties.
Mining and Capital Development
Tindals Mining Centre
Underground mining at the Tindals Mining Centre continued strongly during the quarter with almost 1,600metres of capital and operating development completed. A steady ramp-up of stoping commenced with ore production growing from 16,000 tonnes in April to 44,000 tonnes in June. Two declines continue to be advanced at Tindals. Capital development is now four levels in advance of stoping at Empress, Countess and Perseverance.
Production will continue to increase incrementally at Tindals over coming months and is expected to reach sustainable levels by the middle of the December quarter 2010.
The Mount
In June, long hole and hand held stoping commenced at The Mount on the first two levels of the German Main and German West lodes. In addition, detailed evaluation work also commenced on the next phase of development to advance activities at The Mount. The next phase of exploration and development is designed to achieve two objectives. Firstly to ensure continued development on the German lodes, ensuring continued production. This will be achieved by developing vertically downwards for another two levels and accessing what has previously been published as reserve.
Simultaneously it is planned to develop a full flitch of the Mount Mine including the Mount lodes and Fuchs lodes to aid understanding and establish additional high grade production platforms.
Processing
The Three Mile Hill facility reached its full operating capacity in June, milling 97,800 tonnes for the month and 254,700 tonnes for the quarter. During the quarter, the first full reline for the mill was carried out which reduced the availability of the mill by six days during May. Mill availability in June reached 97.4%.
During the quarter, a total of 67,000 tonnes @ 1.3g/t of low grade stocks were processed to supplement the ramp up of the underground operations. Focus has over 1 million tonnes of this material stockpiled located within 2km of the mill.
The first of two toll milling campaigns was completed during the quarter for La Mancha Resources, with a total of 89,800 tonnes of La Mancha’s White Foil ore processed. A second toll milling campaign will be carried out for La Mancha in September 2010. This will be the final toll milling campaign to be carried out by Focus Minerals on a dollar per tonne basis.
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