Chairman s Address Austral Gold Limited General Meeting 29 November 2010

Transcription

1 CHAIRMAN S ADDRESS to the Annual General Meeting of Shareholders of Austral Gold Limited Monday 29 November Slide 1 Ladies and Gentlemen - it is just after 11am and a quorum is present. I declare this Annual General Meeting of Austral Gold Limited properly constituted and open. My name is Mark Bethwaite and I am the Chairman of Austral Gold Limited. I would like to introduce Robert Trzebski, the other Director with us today. Apologies have been received from Eduardo Elsztain, Saul Zang, Pablo Vergara del Carril, and Stabro Kasaneva. I would like to introduce others involved with Austral Gold who are here today. o Firstly, Company Secretary and Chief Financial Officer Catherine Lloyd. Catherine is about to go on maternity leave and Jemma Dudley-Smith will act as CFO and Co Secretary whilst Catherine is on leave. o Sonja Poturica, who manages our Sydney office o Calin Scott from PKF, Austral Gold s auditor. On behalf of all of us, thank you to PKF for hosting today s AGM. o We also have Suzie Lossano from Norton Rose, Austral Gold s Legal advisors. The formal business of this meeting is to consider and if thought fit to approve five resolutions as set out in the Notice of Meeting which I propose, with your approval, to take as read. Is that Notice of Meeting approved? Thank you. Before addressing those resolutions, I would to like update you on Austral Gold s activities since the last Annual General Meeting of shareholders, in November Strategy Austral Gold s strategy has always been to be to maximize shareholder value by the development of mineral deposits in which Austral Gold has an interest, providing such development demonstrates superior rates of return. Operations Austral Gold has exploration areas in Argentina and Chile. Guanaco, our flagship gold project is also located in northern Chile. 1

2 I will deal first with our Argentine exploration prospects. We are active in the province of San Juan and have interests in the province of Santa Cruz. Slide 2 San Juan is in the north west of Argentina, near the border with Chile. Under an Agreement with Argentina Minera SA, Austral Gold is earning an interest in tenements covering approximately 227,000 hectares in San Juan. The properties are located near Xstrata s advanced El Pachón copper exploration project in Argentina and Los Pelambres owned by Antofagasta Minerals in Chile. Slide 3 In southern Patagonia, Austral Gold has nine tenement applications totalling almost 85,000 hectares in the Macizo el Deseado area in the Province of Santa Cruz. Slide 4 Guanaco I now turn to our most important asset - the Guanaco Gold Project in Chile 100% owned by Austral Gold. Guanaco is located some 220 kilometres south east of Antofagasta in northern Chile at an elevation of 2600 metres. Slide /10 has been a year of intense activity and achievement at Guanaco. The best way to describe the year is to review the announcements marking key milestones along our journey to production. In early September 2009, we announced the appointment of Stabro Kasaneva, Rodrigo Ramirez, Iván Cáceres, Christian Cubelli and Rafael Ocáriz. This quality team is widely respected in the industry and highly experienced in bringing Chilean gold and base metal mines to production. On 21 October 2009, we announced the mandating of AMEC to conduct a Bankable Feasibility Study into restarting mining and processing operations. AMEC is an international project management and engineering services company with extensive experience in the design and construction of mining projects. On 29 October 2009, Austral Gold announced the commencement of the 2009/10 drilling campaign at Guanaco. The objective of this campaign was to increase measured, indicated and inferred resources of gold and silver. 2

3 On 20 November 2009, Austral Gold announced steps to achieve limited early gold production from the retreatment of heap leach material from prior mining operations at Guanaco. Critical components of the existing crushing and gold recovery plant on site were disassembled and sent to workshops in Antofagasta for repair and upgrading. On 21 January 2010, we announced the commencement of decline construction at Guanaco. The 1500 metre underground decline, designed to facilitate exploration of the Cachinalito and nearby vein systems and for ore haulage during mining, was started soon thereafter and is now almost complete. On 17 August 2010, Austral Gold released the Bankable Feasibility Study undertaken by AMEC into the reopening of Guanaco. The key parameters identified by the BFS were: Probable reserves (underground, open pit & heap leach) of 380,000 ounces of gold, calculated using a gold price of USD825 per oz. Capital costs of USD52 million. Average annual gold production of 50,000 ounces of gold. A payback period of 3 years. An internal rate of return of 37%. A net present value (at an 8% discount rate) of USD33 million, and A cash cost net of silver credit over projected mine life of USD560 per ounce of gold. The financial results I have just given are projected on a gold price declining from USD1130 in 2010 to USD960 per ounce in On 6 October 2010, Austral Gold announced the engagement of Incopesa, an open cut mining contractor, to undertake open pit and heap leach operations at Guanaco. Work on deepening existing open pits and re-handling heap leach material for secondary treatment has now commenced. The most exciting announcement of the year, indeed in the history of the Company, came on 26 October After many years of exploration and project development, Austral Gold poured its first gold dore bar on 19 October. I must advise shareholders that gold production is not yet continuous as the new and refurbished processing plant is under commissioning. 3

4 I am delighted to report however that the Company has delivered on the ambitious program I announced at the November 2009 AGM to undertake a Bankable Feasibility Study to undertake the 2009/10 Exploration Program to drive an exploration decline to prepare for secondary leaching of heap leach material and to make Austral Gold a producer in the shortest possible time. Slide 26 I am also delighted that Austral Gold is becoming a producer when the gold price is at record levels close to USD 1400 per ounce. Slide 27 FORMAL CONSIDERATION OF RESOLUTIONS ON NOTICE OF MEETING I would now like to turn to the formal business of the Meeting. The proxies in relation to the five Resolutions in the Notice of Meeting which have been received by the Company before the closing time and date are as shown on this slide. The first item of formal business is: RESOLUTION 1 ADOPTION OF FINANCIAL STATEMENTS & DIRECTORS REPORTS The Company s Financial Report and reports of Directors and Auditors for the year ended 30 June 2010 were posted on the Company s website and mailed to all shareholders who requested it together with the Notice of this Annual General Meeting. I now move that Resolution 1 as set out in the Notice of Meeting as an ordinary resolution: To receive and consider the Annual Financial Report together with the Directors and Auditor s Reports for the period ending 30 June 2010 be approved by shareholders The motion is now open for discussion. This is the opportunity for shareholders to comment on or ask questions in relation to the affairs and activities of the Company over the past financial year and I invite you to do so now. 4

5 There being no more discussion, I now put the motion all those in favour? Against? I declare the motion carried and Resolution 1 approved. I now move to Resolution 2. RESOLUTION 2 ADOPTION OF REMUNERATION REPORT The Remuneration Report is set out in the Directors Report in the Company s 2010 Annual Report. The Remuneration Report sets out the Company s remuneration arrangements for the Directors and senior management of the Company. The Corporations Act requires that a resolution to adopt the Remuneration Report be put to the vote of the Company. Shareholders however, should note that the vote on Resolution 2 is advisory only and not binding on the Company or its Directors. I now move that Resolution 2 as set out in the Notice of Meeting as a non-binding resolution: That for the purposes of Section 250R(2) of the Corporations Act, the Company be authorised to adopt the Remuneration Report. be approved by shareholders. The motion is now open for discussion. There being no more discussion, I now put the motion all those in favour? Against? I declare the motion carried and Resolution 2 approved. I now move to Resolution 3 but as this item concerns myself, I will hand over the Chair to Dr Robert Trzebski. 5

6 RESOLUTION 3 RE-ELECTION OF MR MARK BETHWAITE Mr Bethwaite was appointed as a Director on 3 April 2007 and was re-elected at the Annual General Meeting of the Company on 26 November He now retires by rotation and, being eligible, seeks re-election in accordance with clause 13.2 of the Company s Constitution. A brief profile of Mr Bethwaite is contained in the Company s 2010 Annual Report. I now move that Resolution 3 as set out in the Notice of Meeting: That Mr Mark Bethwaite, who retires by rotation in accordance with clause 13.2 of the Company s Constitution and, being eligible, offers himself for re-election, be re-elected as a Director of the Company. be approved by shareholders. The motion is now open for discussion. There being no (more) discussion, I now put the motion. All those in favour? Against? I declare the motion carried and Resolution 3 approved. I (Robert) now hand the Chair back to Mark Bethwaite. Thank you Ladies and Gentleman. I now move to Resolution 4. RESOLUTION 4 RE-ELECTION OF DR PABLO VERGARA DEL CARRIL Mr Vergara del Carril was appointed as a Director on 18 May 2006 and was reelected at the Annual General Meeting of the Company on 26 November He now retires by rotation and, being eligible, seeks re-election in accordance with clause 13.2 of the Company s Constitution. 6

7 A brief profile of Mr Vergara del Carril is contained in the Company s 2010 Annual Report. I now move that Resolution 4 as set out in the Notice of Meeting. That Mr Pablo Vergara del Carril, who retires by rotation in accordance with clause 13.2 of the Company s Constitution and, being eligible, offers himself for re-election, be re-elected as a Director of the Company." be approved by shareholders. The motion is now open for discussion. There being no (more) discussion, I now put the motion. All those in favour? Against? I declare the motion carried and Resolution 4 approved. I now move to Resolution 5. RESOLUTION 5 APPROVAL OF TOTAL AGGREGATE REMUNERATION TO DIRECTORS Clause 13.7 of the Company s Constitution requires shareholder approval of the upper limit of the total aggregate amount paid to Directors per annum. Approval is sought to set the upper limit of Director remuneration at $600,000. Adoption of this resolution does not mean that the full amount will be paid to Directors. The total aggregate amount proposed in this resolution takes into account the appointment of Mr Stabro Kaseneva as Executive Director and Chief Operating Officer and current marketplace remuneration for executive and non-executive Directors. There has been no increase in the remuneration of non-executive Directors for the year ended 30 June For details of the amounts paid to Directors please refer to the Directors Report contained in the 2010 Annual Report. 7

8 The Company will disregard any votes cast on the resolution by a Director and any associate of a Director. However, the Company need not disregard a vote if: (a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or (b) it is cast by a person chairing the meeting as proxy for a person who is entitled to vote, in accordance with direction on the proxy form to vote as the proxy decides. I now move that Resolution 5 as set out in the Notice of Meeting. That in accordance with clause 13.7 of the Company s Constitution, the total aggregate remuneration paid to Directors will not exceed $600,000 per annum. The motion is now open for discussion. There being no (more) discussion, I now put the motion. All those in favour? Against? I declare the motion carried and Resolution 5 approved. That concludes the business of today s meeting and I thank you for your attendance. Looking to the future, Austral Gold has a significant asset in the Guanaco Project in Chile which is now in production and the focus of major efforts to lift its production level towards 50,000 oz per annum. I would like to again thank PKF, the Company s auditors, for making this room available to us. I now have pleasure in inviting you to join Directors, staff and our advisors for coffee and light refreshments. 8