Operational and corporate upd

RNS Number : 4680X

Ovoca Gold PLC

07 December 2010

 



Ovoca Gold PLC

7 December 2010

Ovoca Gold plc ("Ovoca" or the "Company")

Operational and corporate update

Highlights:

·      Extension of license for Rassoshinskaya

·      US$55.4 million of Cash and Securities, pro forma as at end 3 December 2010

·      Share buy back court authorities set to be in place by year-end

License Extension

Ovoca is pleased to announce that the Rassoshinskaya exploration license has been extended for two years to 15 February 2013. The Rassoshinskaya license is in the Northeastern part of the Magadan Region, Russia and contains the Olcha and Podgorniy projects. The newly extended right to explore was granted by Rosnedra, the Russian State regulator.

Cash and Equity Investments

Currently, Ovoca has circa 1.3 million Polymetal common shares worth US$24.8 million as at close of business on 3 December 2010. Additionally, the Company has approximately US$9.1 million in cash and US$21.5 million in a diversified portfolio of gold mining equities. In total, the pro forma total cash and securities position of Ovoca as of 3 December 2010 is US$55.4 million.

Buy Back

The final documentation needed from the Irish courts is in the process of being filed and it is expected Ovoca can start to execute its share buy back for up to 10% of the Company's issued share capital by the end of the year.

Tim McCutcheon, CEO, comments: "The extension of the Rassoshinskaya license by Rosnedra was granted on the basis of the substantial exploration potential in the license area.  Ovoca has more time to further explore the Olcha and Podgorniy projects and intends to convert those projects to exploitation status as soon as possible subject to satisfactory exploration results. It also demonstrates Ovoca's positive experience working in the Russian gold sector.

Our cash and equivalents position is very strong, and our strategy to give shareholder exposure to the gold price before we have our own gold production has been performing well. Our per-share cash and investments value is approximately GBP 0.40, and so we are still trading at a discount to cash and investments."

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, Rassoshinskaya and Nevsko-Pestrinskoye 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. Internal preliminary estimates suggest a gold resource (non JORC code of Russian standard compliant) of over 700,000 ounces.  The Company intends to put Stakhanovsky into production by 2013.

Rassoshinskaya is in the North Eastern part of the Magadan Region about 200 kilometres from the town of Simchan. 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.

Nevsko-Pestrinskoye is located in the central part of the Magadan region near the town of Omsukchan. A year-round road and powerline are near the site. The license completely surrounds the Goltsovoye silver deposit, which was owned by the Company from 2006 - 2009 and sold to JSC Polymetal for US$47.7 million at the time of closing. Ovoca intends to investigate and explore known mineral occurrences that extend beyond the Goltsovoye license area onto Nevsko-Pestrinskoye.

Ovoca Gold Plc

Timothy McCutcheon [phone] [e-mail]

Davy

John Frain [phone]

 

END

 

 

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