Allied Gold – Quarterly Report

Production:

• Gold production of 72,609 oz for the 12 months to 30 June 2009
• Gold production of 16,739oz for 3 months to 30 June 2009
• Cash costs of A$771/oz (US$586/oz) for June quarter and A$651/oz  (US$490/oz) for FY09
• Allied Gold produced its 100,000thoz from Simberi Gold Project.

Exploration and Reserves

• FY 2009 Ore Reserves increased to 1.11Moz contained gold  from 0.67Moz contained gold (~10 year mine life at 80,000ozpa)

• FY 2009 Ore Resource increased to 4.7Moz contained gold from 3.3Moz contained gold with 10.1Moz of contained silver.

• Exceptional drill results at Pigibo prospect point to new production potential.

• Barrick exploration JV identifies potentially large copper gold porphyry mineralisation at Banesa.

Corporate

• Debt free with A$21 million cash and US$25m project facility retired 21 months early.Realised price for quarter of A$929/oz (US$714/oz) and for FY09 of A$1086/oz (US$783 oz)

• Accelerated hedge book deliveries with 54,583oz remaining.

Outlook

• Production of  ~ 20,000oz in Sept quarter and 80,000 oz in 2009/10

• Scoping studies on oxide plant expansion and sulphide pre-feasibility study progressing..

COMMENT by Executive Chairman Mark Caruso:
“Allied Gold has had a highly successful 12 months with production and reserve increases. The company has established a solid financial platform for growth and we continue towards our goal of sustained exploration success and producing in excess of 250,000 ounces by 2012.“  Over the coming periods our focus remains on optimising cash costs and progressing various project development studies.

Comment below from non-house analyst Fairfax
Allied Gold (AGLD LN) 19p mkt cap £102m – Quarterly report shows 16,739oz gold

• Production in the quarter to June reached 16,739oz gold at a cash cost of US$586/oz from the company’s Simberi Gold project in PNG.  In the 12 months to June a total of 72,609oz were produced for a cash cost of US$490/oz.

• The company has A$21m in cash and no debt having retired a US$25m project facility 21 months early.  The company still has a hedge book with 54,583oz remaining at US$700/oz.  At the end of June the mark to market on the hedge stood at around US$10m loss.

• The company expects to produce 20,000oz this quarter and 80,000oz for the year to next June.  Longer term, Allied Gold is aiming to get to 250,000ozpa Au by 2012.

• Mining at Simberi faced tough conditions this year with over 6m of rainfall.  Mining throughput increased by 15% to 518,827t and processing was up 8% to 462,471t.  The higher costs in the last quarter was a consequence of lower grades which averaged 1.27g/t versus the year to date average of 1.64g/t.  Rain and lower grades led to the 4% quarterly production fall.

• A study is under way to raise name plate capacity  of the existing plant from 2.2mtpa to 3mtpa which would allow production to ramp up to 100,000ozpa.

Calls will begin shortly in order to determine interest.