Annual Report

RNS Number : 1969B

Ovoca Gold PLC

12 April 2012

 



Ovoca Gold plc

Annual Report 2011

Ovoca Gold plc ("Ovoca" or the "Company") is pleased to announce its Annual Report and Financial Statements for the year ended 31 December 2011, which has been posted to shareholders today. Please click on the following link to view the Annual Report and Financial Statements:

http://www.rns-pdf.londonstockexchange.com/rns/1969B_-2012-4-12.pdf 

The Annual General Meeting will be held at Buswells Hotel, 23-25 Molesworth Street, Dublin 2 at 12.00 p.m. on Friday 11 May 2012.

Key points:

·        Net income for 2011 of €4.263million (US$5.937 million)

·        Cash and cash equivalents and available for sale financial assets of €28.703million (US$37.166 million) as at 31 December 2011

·        Appointment of Kenneth Kuchling as non-executive director - ex-Senior Mining Engineer for Rio Tinto's Diavik Diamond Mine between 1997 - 2000 and consultant to multiple high profile gold mines globally

·        Maiden Stakhanovsky resource, JORC Inferred 350,000 oz gold at 1.2 g/t (cut-off grade 0.5 g/t gold) Announced 2 February 2011

·        Updated JORC Inferred resource for Olcha of 9.2mn tons to give 650,000 ounces gold at 2.20 g/t and 3.59mn ounces silver at 12.12 g/t (cut-off grade 1.0 g/t gold) Announced 7 July 2011

·        Appointment of Fairfax I.S. PLC as joint broker

·        Share buyback programme closed, total number of ordinary shares held in treasury at year-end is 1,095,000

·        Received from the Russian regulatory bodies the "Certificate of Discovery" for Olcha, a key milestone in obtaining an exploitation license

Operating statistics:

·      9,283 metres of diamond drilling on Podgorniy, Zet, Olcha

·      986 metres of trenching on Podgorniy plus extensive mapping and geophysical work processed for Podgorniy, Zet, Vist, and Olcha

·      Approximately 8,000 tons of sample ore collected on Stakhanovsky and the completion of processing facility construction

Tim McCutcheon, CEO of Ovoca Gold commented:

"You may note that our annual report for 2011 is coming out in the beginning of April. This is the latest outward sign of the turnaround in Ovoca that has taken place over the past three years. New management both operationally and at the board level, new assets, a complete clean-up of our corporate structure, sale of non-core assets and a new level of dialogue and connection with our shareholders are all the result of hard work to make Ovoca better. By delivering our financial data faster than ever before, shareholders now have the ability to know earlier and in more detail how the Company is performing.

Our exploration and development program in 2011 had both success and disappointment.  On Rassoshisnskaya we drilled Zet and Podgorniy for the first time.  These are new targets and significantly, they are targets that were largely identified by the Ovoca team and not a holdover from previous State work. As such, I can say that Ovoca is on the leading edge of gold exploration in Russia, as sadly, the industry on the whole has been living off exploration results that are over 40 years old while doing precious little to find the next source of mining growth in highly prospective Russia. On Podgorniy it is clear that Ovoca has found a large mineralized geological structure and it will be our goal to discover if the grade of the mineralization is high enough for commercial exploitation. With Zet, Ovoca has a solid gold-silver target that has many similarities with Olcha and it could be a complimentary ore deposit to any future operations in that area. On Olcha, we decided to focus our attention on securing the exploitation license needed to take the asset to the next step - development. In short, on Rassoshinskaya, Ovoca had a very productive year and is well placed to further advance the various targets on the license in 2012.

Unfortunately, Stakhanovsky proved to be a significant challenge for Ovoca in 2011, as the building of a facility big enough to process 20,000 tons of sample ore in a summer took longer than expected. Normally a few delays would not be so significant, but due to the extreme seasonality of working in the Magadan Region interior, any delay can force an entire year's work to be pushed forward to the next year (which in practical terms means the summer months of June, July, August). Ovoca was not successful in gathering new geological data in 2011 on Stakhanovsky, but the processing facility is built and ready to restart for the 2012 season. Also, we prepared in 2011 approximately 8,000 tons of sample ore, and once the facility is running we will be able to put it to work right away. A key moment for Ovoca regarding Stakhanovsky was the regulatory hurdles the Company faced to build the facility. Our team proved that none of the skills and know-how gained during the construction of Goltsovoye have been lost and that Ovoca is extremely well placed to navigate the Russian mining industry regulations to successfully build mining assets in Russia in as short as possible time."

Notes to Editors

Ovoca Gold PLC ("Ovoca" or "the Company") is a mineral exploration and mine development company listed on the AIM market of the London Stock Exchange (Ticker: OVG) and on the ESM market of the Irish Stock Exchange (Ticker: OVX). The Company's principal activity is gold exploration in the Magadan Region of the Russian Federation. Previously Ovoca acquired, developed and sold to JSC Polymetal the Goltsovoye silver project located in the Magadan Region. Currently, Ovoca is aggressively exploring and developing its 100 per cent owned Stakhanovsky and Rassoshinskaya licenses.

Stakhanovsky is located approximately 40 kilometres north of Susuman, the second largest city in the Magadan region. It is accessible by year-round road and there is power infrastructure on site. Stakhanovsky's initial independently established resource was announced in an RNS on 2 February 2011 and is available on the Company's website. The Company intends to put Stakhanovsky into production by 2014.

Rassoshinskaya is in the North Eastern part of the Magadan Region about 200 kilometres from the town of Seimchan. There is no nearby infrastructure. Rassoshinskaya hosts an epithermal gold deposit named Olcha, which is the focus of Ovoca's exploration program. Olcha and nearby satellite deposits have the potential to host a high grade multi-million ounce gold resource. Olcha's initial independently established resource was announced in an RNS on 7 July 2011 and is available on the Company's website.

Ovoca Gold Plc

Timothy McCutcheon [phone] [e-mail] 

Davy - NOMAD and joint broker

John Frain [phone]

Fairfax I.S. PLC - joint broker

Ewan Leggat/Laura Littley [phone]

 

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