news

Investment Highlights

Junior gold developer Range River Gold Ltd (RNG) has

started a third phase of production at the historic Mt

Morgans operation near Laverton in Western Australia. First

ore from the high grade, low tonnage Craic deposit is being

processed at the Granny Smith mill and additional

underground production is expected in Q4 CY10. RNG

intends to deliver 40,000oz p.a. of gold from known

resources at Mt Morgans over the next five years. Potential

remains for RNG to delineate additional resources with

drilling in the June Quarter. We anticipate Mt Morgans will

re-enter production in line with RNG’s expectations and

view forthcoming assay results from drilling at the Morgans

North prospect as a key catalyst.

Ramp up underway. RNG achieved first ore production at Mt

Morgans in February, nine months after acquiring the exploration

tenements (800km?) from Barrick Gold Corp in a $3.5m scrip

deal. RNG anticipates average gold production from Craic,

Ramornie, King Street and Transvaal deposits of 40,000oz p.a

over five years at a cash cost of A$700/oz over the life-of-mine

(LOM). Since May 2009, RNG has spent ~$0.5m delineating a total

Mineral Resource of 547,000oz of gold (5,347,600t at 3.18g/t Au).

This equates to a total cost for RNG of A$7.30/oz of in-situ gold at

Mt Morgans.

Whats the Craic? The Craic deposit (also known as the Sons of

Gowrie deposit) is a previously unmined resource of 252,200t at

7.9g/t Au (64,400oz) which consists of flat dipping mineralised

basalt/porphyry structures which control repeatability at depth.

The first ore from Craic has been sent to Barrick Gold’s Granny

Smith mill, located 30km from Mt Morgans. The Craic deposit is

likely to remain the cornerstone for development at Mt Morgans

ahead of underground production in Q4 CY10.

Additional output. RNG recently completed infill drilling of King

Street and Transvaal North open pit resources which are expected

to add to planned underground production at Craic and Transvaal.

The company has initiated a cutback at Ramornie with production

scheduled to begin in April. Additional ore may be sourced from

King Street and possibly Morgans North and Westralia deposits as

the Craic underground development gets underway.

Exploration upside. Several high grade drill intersections have

been recorded in previous exploration by Barrick Gold which RNG

intends to follow up with drilling in Q2. We note potential for RNG

to reach targeted production of 60,000tpa with the discovery of

additional resources at Morgans North. Historic intercepts at

Morgans North have included 3m at 76g/t Au, including 1m at

115g/t Au, and further drilling is required to delineate a resource.

Potential tie ups. Having reclaimed its status as a gold producer

RNG is seeking to acquire producing assets or projects that can be

advanced through completion of a feasibility study and project

financing. RNG may also farm out early stage exploration projects

to junior gold exploration companies.