Allied Gold Ltd (AGLD) – Quarterly Report

QUARTERLY REPORT FOR THE PERIOD ENDED 31 DECEMBER 2008

Highlights
• Production target achieved with a 19% increase in gold production to 20,989oz for the quarter.
• Reduction in cash costs of 4% to A$597 (USD$401)/oz.
• The average price/ oz received for the quarter was A$1,160
• Increased mining production of 40% to 557,744 tonnes for the quarter.
• Increase of 27% in tonnes processed to 426,276 tonnes for the quarter. Production ramp up progressing well.
• Further reduction in bank debt facility of A$5.0M during the quarter.
• March quarter production forecast of 20,000oz.
• Sulphide pre-feasibility study commenced to underpin expanded production profile up to 200,000oz p.a. by 2011.
• Resources for the Pigiput deposit increased by 204,000oz and the Sorowar deposit increased by 611,000oz taking the total Resource upgrade during Calendar 2008 to 815,000oz. This now brings the total Simberi gold resources to approximately 3.2 million ounces.
• A new Reserve upgrade for Sorowar and Pigiput East is planned in the March 2009 quarter.  This will underpin the extension of existing mining operations.
• Oxide mineralisation intersected in the area between the Pigiput and Pigibo oxide deposits over a 400 metre strike length.
• Barrick completed two diamond cored holes and commenced a third at the Tupinda copper prospect on Big Tabar Island. Encouraging results with copper molybdenum mineralisation intersected in two of the holes.