Siberia in from the cold

SIBERIA Mining Corporation is the latest gold company to chase an Australian Stock Exchange listing this year.

Company spokesman David Thompson said Siberia Mining had raised $750,000 in seed capital, through contacts that were mostly in Perth.

He said the company, being formed from Braeside Australia Limited, had between 20 and 30 shareholders.

Mr Thompson said Braeside’s founders – Adrian Byass, Jonathan Downes – together with Richard Hill – were three of the brightest young geologists in the country.

And the company’s holdings were significant enough to rival those held by other larger companies around Kalgoorlie. The company has also gathered some high profile names, including Andrew Forrest who will be chairman, chief executive and managing director of Siberia.

Braeside Australia was registered in July 2001, with Mr Byass and Mr Downes listed as directors. Mr Forrest, Mr Linegar and Mr Hill were registered as directors on January 20 this year and Ernst & Young (Perth) was appointed auditor in November.

The Australian Securities and Investments Commission received a new name reservation application on January 24 this year.

Siberia Mining plans to list next month.

Gold production off

THERE may be renewed interest in gold offerings but it has yet to be matched to higher gold production, which has fallen for the fifth successive year.

However, production levels appear to have now levelled off thanks to several new gold producers coming on stream in WA during the last quarter of 2002.

The Thunderbox project in WA owned by Lionore Mining International Ltd and Dalrymple Resources NL and the Equigold NL-owned project, Kirkalocka, commenced operations during the December quarter. The South Australian Challenger operation owned by Dominion Mining Ltd was another addition that helped boost production by 3 per cent in the quarter to 71 tonnes.

Equigold announced a net profit of $5 million for the December half on production of more than 50,000 ounces of gold at an average price of $584 per ounce.

DJ Carmichael senior analyst Peter Strachan forecasts that this will rise to more than 79,000 ounces as the Kirkalocka mine makes a six month contribution and Mt Rawdon ramps up to its expanded production rate of 100,000 ounces per annum.

“Equigold began calendar year 2003 in a strong financial position with net debt of $12 million, gearing of 19 per cent and working capital of $6 million,” Mr Strachan said.

He expects operating cash flow to jump from $7.2 million to $14 million during the June half, which could allow for a $5 million reduction in debt as well as a dividend payment of $3 million and money to spare to spend on exploration at Kirkalocka and Mt Rawdon.

By 2003-04, Mr Strachan said he expected to see the company to produce 161,000 ounces of gold, with revenue doubling to $96 million providing earnings per share of 12.1 cents resulting in a 6.5 per cent yield.

Equigold is currently trading at 93 cents and a market capitalisation of $133 million.

A survey released earlier this week by Surbiton Associates Pty Ltd found that 275 tonnes was produced for the full 2002 calendar year, compared with the peak output in 1997 when 314 tonnes of gold was produced.

A Surbiton source said rising gold prices had prompted others to also reassess their gold projects. Jervois Mining Ltd and its associates Bullabulling poured their first gold at year’s end while Oroya Mining Ltd expects to re-open the Mt Gibson operation later this year. Meanwhile, recent ASX addition Apollo Gold Mining Ltd is looking to bring a processing plant at Laverton back into production.

Surbiton managing director Sandra Close said that although annual gold production had fallen by almost 40 tonnes since 1997, the value of Australia’s annual gold output had increased from around $4.5 billion to around $5 billion.

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