Castlemaine Bendigo Bendigo Kyneton Ballarat Castlemaine
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Wedderburn SEBASTIAN PROJECT Inglewood SEBASTIAN JV St. Arnaud TARNAGULLA PROJECT Tarnagulla Bendigo Dunolly Maldon Maryborough CASTLEMAINE PROJECT Castlemaine Chewton Avoca Kyneton Creswick Ballarat CASTLEMAINE GOLDFIELDS LIMITED 2009 ANNUAL REPORT Corporate Contents Directory CASTLEMAINE GOLDFIELDS LIMITED Item Page ABN 45 073 531 325 ASX CODE CGT Chairman’s and Managing Director’s Report 1 REGISTERED & CORPORATE OFFICE 113 Adelaide Street Review of Activities and Tenements 3 PO Box 57 Chewton, Victoria 3451 Directors’ Report 10 Ph: (03) 5472 3411 Fax: (03) 5472 3002 Auditor’s Independence Declaration 20 Email: [email protected] Web: www.cgt.net.au Corporate Governance 21 SHARE REGISTRY Financial Report – 31 December 2009 24 Computershare Investor Services Pty Ltd Yarra Falls Independent Audit Report to the Members 57 452 Johnston Street Abbotsford, Victoria 3067 Shareholder Information – 28 February 2010 59 Ph: 1300 850 505 (Investor Enquiries) Fax: 61 3 9473 2500 Web: www.computershare.com AUDITORS PricewaterhouseCoopers Chartered Accountants 2 Southbank Boulevard Southbank Melbourne, Victoria 3006 LAWYERS Baker & McKenzie Level 19, CBW, 181 William Street, Melbourne, Victoria 3000 BOARD OF DIRECTORS John C. Goudie Non-Executive Chairman Gary F. P. Scanlan Managing Director and CEO Peter L. McCarthy Non-Executive Director SENIOR MANAGEMENT Wessley B. Edgar Exploration Manager Oliver A. Halliwell Administration Manager John W. Jennings Company Secretary and Chief Financial Officer Annual General Meeting The Annual General Meeting of the members of Castlemaine Goldfields Limited will be held at the offices of Baker & McKenzie, Level 19, CBW, 181 William Street, Melbourne at 10.00am on Tuesday 4 May 2010. The full notice of meeting and proxy form are enclosed with this report. Cover image: Gold occurrances within the Bendigo- Ballarat Zone which has produced over 64 million ounces of gold since 1851. Background is a grey-scale image of magnetic field showing granite boundaries and tertiary basalt distribution. Right: Engine House, Duke of Cornwall Mine, Fryerstown. Chairman’s & Managing Director’s Report In the lead up to the 2009 year, the company had successfully carried out over 26,000 metres of diamond drilling resulting in the release of the JORC code Inferred Resource of 686,000 ounces of gold for the Chewton Deposit and associated remnant Wattle Gully material and had identified three premier project areas along the central corridor of the Castlemaine gold field. Tarnagulla had been farmed out with the expectation that significant expenditure would be injected into the project by the new party. Limited activity occurred at Sebastian while the focus was on Castlemaine. ANNUAL REPORT 2009 CASTLEMAINE GOLDFIELDS LIMITED 1 Chairman’s & Managing Director’s Report With the events of the global financial crisis targeted at defining the next resource drill- at A$50m. The sale is conditional on and the fall in the Australian stock market out project which, in turn, would dictate shareholders approving the issue of new in the first quarter of 2009, expenditure was the development access to the Chewton equity to raise a minimum of A$20m. curtailed across all facets of the business. Deposit. The possibilities remain to access On the same day the company announced Drilling was cut back and corporate Chewton either from within the mining its intention to raise between A$20m and overheads were reduced wherever possible. licence or from the pine plantation in the A$40m in new equity by way of a placement To this end, directors’ fees were halved north of the exploration licence, using a to institutions and sophisticated investors. and the managing director went on to successful Quartz Hill discovery to spread These funds will be used to complete the reduced hours while activities centered development costs over both projects. acquisition, carry out exploration and with on a complete review and upgrade of the In the December quarter, the company success, development and reopening of exploration data base and refinement of the undertook a review of a possible project the mine, ongoing exploration on existing modelling for the Castlemaine gold field. acquisition that would complement the company licences and general working The Sebastian freehold property was also existing suite of gold projects in Central capital. sold during the year. Victoria. This would bring forward the likely The scene is set for an exciting year ahead. While it was regretful that a number of timing of gold production and deliver first Our advancements have occurred through positions were let go at this time, it is class surface milling capacity and related the talent and persistence of the team and pleasing to report that there were no infrastructure to support ongoing mining the ongoing support from shareholders significant safety or environmental incidents operations. A small capital raising was during the most difficult market conditions at all throughout the year and the core made in December to keep working capital experienced since the floating of the exploration team remained intact. Time was at an adequate level while this evaluation company in 2005. We are now poised to well spent further validating the integrity of took place. take the company on a major step forward. all new and pre-existing data and planning On 4 March 2010 the company entered the drilling programs for when exploration in into a binding conditional sale agreement the field recommences. with Lihir Gold Limited (LGL) to acquire The June quarter of the year saw the release the Ballarat Gold Project in Victoria. of an independent mining scoping study The company will pay LGL A$4.5m in John Goudie on the Chewton Deposit. This study, based cash, assume rehabilitation bonds for Chairman on a standalone assessment, evidenced $4.1m plus a 2.5% royalty interest in a robust project. Drilling in 2010 will be possible future production, capped Gary Scanlan Capital allocation (since incorporation) $16.5m – ($000) Managing Director and Chief Executive Officer Exploration $12,226 – 74% Capex $315 – 1.9% Corporate $3,484 – 21% Indirect Expenditure $409 – 2% Sebastian $1,976 – 12% Security deposits $80 – 0.5% Tarnagulla $1,198 – 7% Castlemaine $9,052 – 55% 2 CASTLEMAINE GOLDFIELDS LIMITED ANNUAL REPORT 2009 2km Line of Reef Gold Mine - Major Gold Mine - Minor Shellback open pit Alluvial/Fluvial assessment Existing drillholes Diamond holes drilled South Fortuna since Jan 2008 PINE CAPPERS Diamond holes previously PROJECT drilled by CGT PLANTATION RC holes (2008) Cappers 3D Target Gentle Model in progress Annie Fiddlers Review of CASTLEMAINE Nimrod North Quartz Hill QUARTZ HILL PROJECT Manchester 3D Target Model Garfield Mines generated. Drill design ready Activities Chewton Post Office Hill WATTLE GULLY MINE Eureka (1934 - 1989) 375,300ozs produced Chewton Deposit: CASTLEMAINE PREMIER PROJECTS ADVANCED (1.1Mt @ 10.3g/t Au) JORC Inferred Resource 574,000 ozs Wattle Gully Tailings A number of complementary activities have taken place this year to Assessment. 14 aircore holes Chewton Deposit completed. Sampling ongoing Mine Scoping Study advance the three premier projects (Refer Figure 1) identified as having high potential for a large gold resource at Castlemaine. The drill database Wattle Gully Mine: Remnant Gold Inferred CWG upgrade, results analysis and geological interpretation have been and Resource 112,000 ozs PROJECT continue to be used to build new enhanced 3D models of the mineralised 3D Target Model of CWG in progress systems at Chewton-Wattle Gully (CWG), Quartz Hill and Cappers projects. The outcome of this work is the fully planned and detailed drill designs for each project. New Era Shicer Fault Shicer Spring Gully Fryerstown Castlemaine Goldfields Limited Figure 1. Castlemaine goldfield showing the CASTLEMAINE (Leases MIN4470, EL3242 G O L D F I E L D S EL4235, EL4372, EL5166, MIN5378) L I M I T E D location of the 3 premier project areas. ANNUAL REPORT 2009 CASTLEMAINE GOLDFIELDS LIMITED 3 Review of Activities Chewton-Wattle Gully Project quartz volumes and gold contents which South Wattle Gully prospect currently (CWG) have potential in the SWG area to host a exists as a single drill hole (CGT_041) The detailed and comprehensive 3D new gold resource at relatively shallow containing two gold bearing fault zones. modelling of the CWG project is nearing depths from surface. The upper zone is now modelled to have completion. Emphasis is being given The objectives of the CWG modelling are: approximately 700m of strike potential at depths of less than 200m from to interpretation of the data-rich areas • Define the South Wattle Gully & South surface (see Figure 2). Gold grades up surrounding the Wattle Gully Gold Mine Chewton targets, to 17g/t have already been intersected that, between 1934-89, produced • Determine the validity of targets within the upper mineralised zone which 375,300ozs from 1.1Mt @ 10.3g/t. In June north of the Wattle Gully Cross Fault occurs as three intervals of high quartz 2008 a remnant JORC Inferred Resource of by modelling gold bearing structures contents which exhibit strong stylolitic 112,000ozs was estimated for Wattle Gully across this fault and defining the together with the Chewton Deposit JORC textures, high arsenopyrite alteration fault displacement from stratigraphic Inferred Resource of 2.1-3.1Mt @ 6.0- and presence of base metal sulphides. knowledge, and 9.1g/t Au (574,000ozs). Very little exploration drilling has occurred • Determine if South Chewton has outside the shallow Phillips Reef targets A number of validation corrections were potential to expand the existing at either the southern or northern ends of made to historical drill data being used in resource estimation with additional the old Wattle Gully mine. Only two deep the South Wattle Gully prospect (SWG) and drilling. West Wattle Gully anticline interpretations holes exist to the south, both of which Using the completed model, design drill (located in Figures 2 and 3). were targeted at the deeper Wattle Gully programs to: The fault associated with mineralisation in Fault Zone (“Lower mineralisation” in • Find the northern boundary to the hole CGT_041 at SWG is now correlated CGT_041).