TSG.L Regulatory News (TSG)

4 May 2005 07:00

Trans-Siberian Gold PLC04 May 2005 news release For immediate release: 04 May 2005 Trans-Siberian Gold plc Circular sent to shareholders on revised terms for second investment by AngloGold Ashanti and Asacha project update. LONDON: 4 May 2005 - Trans-Siberian Gold plc ("TSG" or "the Company") reportsthat it has sent a circular to shareholders outlining the revised terms for thesecond subscription by AngloGold Ashanti Limited ("AGA") and providing an updateon the status of its Asacha project in far east Russia. TSG reported on 28 April 2005 that it had reached agreement with AGA in relationto revised terms for the second share subscription envisaged in the agreementwith AGA dated 30 June 2004, and subsequently amended on 22 December 2004 and 15April 2005, including a revised subscription price of £1.30 per share. TSGshareholders are being asked to approve the revised terms of the proposed secondsubscription by AGA in TSG at an Extraordinary General Meeting on 27 May 2005. Asacha Project Update The review of the capital cost of the Asacha project has resulted in a newcapital estimate of US$82.5 million, net of VAT, which includes allowances forescalation and contingency of US$7.6 million. The new capital estimate alsoincludes US$11.7 million spent up to the end of 2004 on construction of theaccess road, accommodation at site, site preparation and engineering studies,and US$10.5 million which will be spent post start-up, principally on minedevelopment. The capital cost to start-up from the beginning of 2005 is therefore estimatedto be US$60.3 million. The capital cost estimate in the feasibility study(February 2004) was US$54.4 million. The revised schedule envisages first goldproduction towards the end of 2006, although that is dependent on no furtherslippage in committing to critical path items, including equipment with longlead times such as the mill, and mobilisation of the General Contractor for sitepreparation this summer. Based on mining a reserve of 1.25 million tonnes at an average feed grade of15.8 g/t (the official mining reserve approved by GKZ, the State ResourceCommittee of the Russian Ministry of Natural Resources) at an annualised rate of200,000 tonnes per annum, the mine is anticipated to produce 96,000 oz pa ofgold and 178,000 oz pa of silver based on a recovery rate of 94.4%. Based on theGKZ approved reserve the mine will have a life of 7 years. Operating costs arecurrently estimated at US$73.3 per tonne giving a cash cost including royalty ofUS$177/oz at a US$420/oz gold price. On this basis the project is expected tohave an IRR in excess of 15%. Quotations have been received and evaluated for all major equipment items forthe process plant, diesel power plant and mine and orders are ready to beplaced. The process plant is likely to be sourced in China. The permanentaccommodation units have been purchased and the bulk of them are in transit toKamchatka. Detailed engineering will be done by the Russian institutes VNIPI(mine and infrastructure) and IRGIRIDMET (process plant). An experienced andfully licensed Russian General Contractor has been engaged for the constructionphase. Clearance has been received from the State Environmental Expertiseallowing conversion of the land at the site for industrial use. An applicationfor an amendment to the Asacha licence to extend the requirement to produce1,000 kgs of gold by 30 June 2006 to 31 December 2007 has been filed with therequisite authorities. In relation to debt financing for the project the process of due diligence by,and negotiation with the jointly mandated banks, Standard Bank London and EBRD,is continuing. Ends For further information, please contact: Jocelyn Waller,Managing Director,Trans-Siberian Gold plc 01223 265 761/ 07778 164 376 Simon Olsen,Finance Director 01223 265 768/ 07770 484 965Trans-Siberian Gold plc Keith Irons, 020 7444 4155/ 07885 356 639Bankside Consultants Michael O'Brien, 020 7523 8423Chris Howard, 020 7523 8314Collins Stewart This information is provided by RNS The company news service from the London Stock Exchange