OPERATIONAL HIGHLIGHTS
Peak Mines
Peak Mines achieved a milestone in 2008, producing its two millionth ounce of gold since the commissioning of the mine, and has continuously replaced reserves and resources over the last sixteen years.
2008 PRODUCTION
2009 Targets
Gold:100,493 oz
Copper:8.25 million lbs
Cash Cost/oz
(net of by product sales)
$477
Gold:90 - 100 thousand oz
Copper:13 – 15 million lbs
Cash Cost/oz
(net of by product sales)
$370 - $390
History and Location

Peak Gold Mines (PGM) is a medium sized underground gold mining operation located in the Cobar Gold Field of Central West New South Wales, Australia that commenced production in 1992. PGM also produces copper concentrate, which is sold to Asian markets. In 2007, Peak Gold Ltd. acquired PGM from Goldcorp Inc. Peak Gold Ltd. subsequently completed a business combination with New Gold and Metallica Resources in June 2008. Life of mine annual gold and copper production are approximately 90,000 to 110, 000 ounces and 14 to 16 million pounds respectively.

Health, Safety, Environment and Sustainability

PGM is committed to preventing workplace injuries. Lost Time Injuries (LTI) remained the same as the previous year with four occurrences, while the severity was reduced and the LTI frequency rate improved from 1.2 (lost time injuries per 200,000 hours worked) to 1.0. A comprehensive upgrade to health and safety management systems was applied in 2008 to align with new legislation and the OHSAS 18001 international standard.

In 2008, PGM conducted grass seeding at New Occidental and neighboring properties and repaired erosion at New Cobar. Metal recycling has extended to underground operations and is now being undertaken in conjunction with other mines and with the council to establish regional recycling programs in the Cobar area. The company also sponsored a Clean-Up Australia event and held a tree-planting day with public school children at Morelli Park in 2008. The environmental achievements at PGM were recognized at the Local Business Awards of the Cobar Region.

2008 Operating Results

In 2008, PGM produced 100,493 ounces of gold and 8.25 million pounds of copper. PGM had gold sales of 102,928 ounces at a cash cost of $477, net of by-product sales. Comparative figures for 2007 were 116,488 gold ounces and 7.5 million pounds of copper and gold sales of 118,298 ounces at a cash cost of $243 per ounce, net of by-product sales. PGM generated operating cash flow of $39.5 million in 2008.

PGM achieved a milestone in 2008, producing its two millionth ounce of gold since the commissioning of the mine. The operation achieved record mill throughput of 768,727 tonnes, compared to 709,230 tonnes in 2007, and achieved its gold production forecast despite a difficult second quarter. In light of deteriorating copper prices, the management team made the decision to mine higher gold grades versus copper grades, which resulted in copper production being below forecast. Higher cash cost is solely due to a decreasing copper price through the latter half of the year with re-pricing of concentrate in process. Direct operating costs for 2008, in Australian dollar terms were only 10% higher than those of 2007, with the cost per tonne milled unchanged year on year.

Looking Forward

In 2009, PGM will commence production from the Chesney and Perseverance Zone D ore bodies. Production in 2009 is expected to yield 90,000 – 100,000 ounces of gold and 13 – 15 million pounds of copper. Capital expenditures in 2009 are expected to be $24.5 million.

PGM has continuously replaced Reserves and Resources over the last sixteen years. In 2008 the company delivered an updated estimate of mineral Reserves containing 514,000 ounces of gold and 76 million pounds of copper, more than offsetting the production of 252,000 ounces of gold and 21 million pounds of copper during 2007 and 2008. The company continues to explore extensions to the known Resources at Perseverance, Chesney and other deposits and to evaluate the broader potential of PGM’s 845 square kilometres of combined mining and exploration licenses within the Cobar mineral field.