MOE Moelis Australia Pty Ltd

Moto Goldmines Limited (TSX:MGL)(ASX:MOE) - -0- *T Highlights MOTO GOLD PROJECT - Revised independent resource estimate of: - Indicated Resource - 34.33 million tonnes at 2.5 g/t Au for 2.809 million ounces of gold; and - Inferred Resource - 92.87 million tonnes at 2.7 g/t Au for 8.158 million ounces of gold. - Feasibility work continued during the quarter, including; - Conceptual study indicated potential for development of significant gold mine - Appointment of Lycopodium Engineering to undertake pre-feasibility study. - Infill and extension drilling during the quarter continued to identify significant gold mineralisation. A resource upgrade is planned for March 2006. - Appointment of Dr Jeff O'Leary as a non-executive director and Andrew Dinning as Chief Operating Officer. *T DEMOCRATIC REPUBLIC OF CONGO - MOTO GOLD PROJECT The Company continued its activities to advance project feasibility and development for the Moto Gold Project in the north-east of the Democratic Republic of Congo during the quarter ended 31 December 2005. The Company employed 4 drill rigs (one RC and three diamond) at the Moto site, with the focus predominantly on infill drilling designed to upgrade the Resource from the Inferred to the Indicated category. Cube Consulting completed an updated independent resource estimate on November 14, 2005, and a conceptual study on November 17, 2005. Details of both are summarised below. The Company has also appointed Lycopodium Engineering to manage, and various consultants to contribute to, the pre-feasibility study. Activities in relation to project feasibility and development are ongoing. Reports on the exploration activities during the quarter have previously been released on October 25, 2005 "Further significant results at Karagba and Pakaka" and November 7, 2005 "Exploration Update". The details reported in these releases have not been repeated in the following report, but in summary the infill and extension drilling completed during the quarter continued to identify significant gold mineralisation. Resource Estimate for Moto Gold Project Deposits In November 2005 independent consultants Cube Consulting estimated the following Resources at a nominal 1 /gt Au lower cutoff: -0- *T --------------------------------------------------------------------- Deposit Indicated Inferred ----------------------------------------------------- Tonnes Au Au Tonnes Au Au Mt g/t '000Oz Mt g/t '000Oz --------------------------------------------------------------------- Pakaka 19.47 2.4 1,509 Gorumbwa 8.55 6.4 1,750 Kibali 22.60 2.0 1,417 Mengu Hill 8.00 3.3 844 0.98 1.4 43 Mengu Village 1.83 1.6 91 Karagba 36.70 3.1 3,634 Megi 5.21 1.9 312 Marakeke 1.66 1.4 74 Kombokolo 2.08 2.3 155 Sessenge 4.78 2.0 301 0.92 2.3 67 Ndala 0.49 4.0 62 Pamao 13.93 1.6 708 --------------------------------------------------------------------- TOTAL 34.33 2.5 2,809 92.87 2.7 8,158 --------------------------------------------------------------------- *T Upgrading of confidence in Resource Upon completion of the November 2005 Resource estimate extensive infill and / or extension drilling programmes were undertaken at Karagba / Chauffeur / Durba East, Sessenge and Mengu Hill. Results of these programmes are expected to be released in early February 2006. The infill drilling programmes were designed to upgrade the Resource from the Inferred to the Indicated category. A continuous infill and extension drilling programme is planned for the first 6 months of 2006. A resource upgrade for the Karagba / Chauffeur / Durba East, Sessenge and Mengu Hill deposits is planned for March 2006. Conceptual Study On the basis of the results of the August 2005 Resource Estimate, Cube Consulting reviewed the potential for a mining operation based on a number of the ore bodies at the Moto Gold project. In November 2005 Cube Consulting completed a Conceptual Study indicating that a gold mine supporting production of approximately 240,000 ozs of gold per annum could be developed at the Moto Gold project (based on production of 3 million ounces over 12 years). Significant study parameters and assumptions include: -0- *T ---------------------------------------------------------------- Average Throughput Mtpa 3 Feed Grade grams/tonne 2.7 Average Gold Production koz pa 240 Average strip ratio waste:ore 3.1 Average Recovery Rate % 88 Estimated Cashflows(i): @ gold price of 400 $/oz net US$ Million 517 @ gold price of 425 $/oz net US$ Million 589 @ gold price of 450 $/oz net US$ Million 661 @ gold price of 475 $/oz net US$ Million 732 @ gold price of 500 $/oz net US$ Million 803 Estimated operational unit cost US$/oz 218 (rec'd) Indicative Mine Life Years 12 ---------------------------------------------------------------- (i)Undiscounted The above evaluations are preliminary in nature and remain subject to completion of a feasibility study. The numbers shown are projections, which may not reflect actual performance. *T The conceptual study does not include capital expenditure and infrastructure costs. Preliminary estimates of these costs are currently being prepared. Due to the number and variety of ore bodies, extensive metallurgical test work is being undertaken to further quantify indicative recovery rates for each orebody and better define the process flow sheet. Pre-feasibility Work The Company has appointed Lycopodium Engineering Pty Ltd from Perth, Western Australia (WA) to manage key elements of and compile the pre-feasibility study. Their scope includes process flow sheet definition, design and costing of the process plant and infrastructure, management of Knight Piesold and compilation of the overall study. The team of consultants working with Lycopodium include: - Cube Consulting (Perth WA) - Resource Estimates and Mine Design - Independent Metallurgical Laboratories Pty Ltd (Perth WA) - Metallurgical test work - SGS Ghana - Environmental and Social studies - George Orr & Associates (Perth WA) - Geotechnical studies - Knight Piesold (through Lycopodium, Perth, WA) - Tailings dam design Activities in relation to project feasibility and development are ongoing and the Company is continuing to work towards completion of pre-feasibility work by mid 2006 and completion of a bankable feasibility study in 2007. CORPORATE During the quarter Dr Jeff O'Leary joined the Board in the position of Non-Executive Director. Mr Andrew Dinning was also appointed Chief Operating Officer. Mr Dinning has principal responsibility for managing operational activities including the feasibility process and subsequent mine development and plant construction and commissioning at the Moto Gold project. At 31 December 2005 the Company had cash at bank of approximately AU$24.5 million. Additional Notes: Scientific or technical information in this news release has been prepared under the supervision of Greg Smith, Exploration Manager of the Company and a qualified person under National Instrument 43-101 and a member of the Australasian Institute of Mining and Metallurgy (AusIMM). Greg Smith has sufficient experience, which is relevant to the style of mineralisation under consideration and to the activity, which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (the JORC Code). The Information in this report that relates to Mineral Resources is based on a resource estimate compiled by Ted Coupland who is a member of the Australasian Institute of Mining and Metallurgy (AusIMM), Mineral Industry Consultants Association (MICA) and is a Chartered Professional (Geology), and a qualified person under National Instrument 43-101. Ted Coupland is a director of Cube Consulting Pty Ltd. Ted Coupland has sufficient experience which is relevant to gold mineralisation and resource estimation to qualify as a competent Person as defined in the December 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (the JORC Code). Ted Coupland consents to the inclusion in this report of the Information, in the form and context in which it appears. Conceptual Study - The study was undertaken by Cube Consulting Pty Ltd. The objectives of this high level study were a) to provide a first pass indication of the potential of the resource, and b) to provide guidance for exploration drilling with the aim of improving the confidence level of the resource. - The assessment is preliminary in nature, and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the preliminary assessment will be realized. - The study comprised open pit optimisation on 12 deposits, preliminary pit designs on 3 deposits (including 2 phased cutback designs) and a top-down whole-bench mining schedule with associated simple (undiscounted) cashflows. Cost parameters used in the study were mostly derived from average data for similar types of operations and no costing analyses was carried out. Metallurgical recoveries were based on initial test results on five of the deposits, the results of which were applied to resources for which no testing was available. No geotechnical evaluations were completed for the study and indicative slope angles were used. Caution Regarding Forward Looking Statements: Statements regarding the Company's plans with respect to developing the Moto Gold Project are forward-looking. There can be no assurance that any mineralisation will be proven to be economic, that anticipated metallurgical recoveries will be achieved, that future evaluation work will confirm the viability of deposits identified with the project or that future required regulatory approvals will be obtained. Moto Goldmines Limited (TSX:MGL) (ASX.:MOE)