Gallery Gold Ltd (GGN) – Bringing Mupane into production from Oct 2004

• Following the merger with Spinifex in October 2003, Gallery Gold now has two very advanced projects, namely Mupane in Botswana and Buckreef in Tanzania. Mupane is the most advanced, having completed its BFS and is currently in construction with gold production expected to commence from October 2004.
• Mupane expects to produce about 100,000ozpa to 120,000ozpa from treating 1.0mtpa at reserve grades of ~3.5g/t in mineralisation up to 70m wide. Examination of the sections in detail, shows that higher grades could be achieved from selective mining, and a higher grade core could result in underground mining extensions.
• Gallery Gold is currently upgrading the resources of its newly acquired Tanzanian prospects and projects from Spinifex into JORC classifications, and then prioritising their development, focusing initially on Buckreef, Kitongo & Nyakafuru.
• Gallery Gold’s properties surround Africa’s current major nickel province being LionOre’s Phoenix and Selkirk Tati nickel mines in Botswana. GGN has entered into a joint venture with Albidon Ltd (ALB, a Ni-PGM exploration IPO, listing in March 2004). GGN retain a 50% interest in most of its Tati nickel properties and a 35% interest in the Tekwane PGM prospect that is contained in the Selkirk gabbro.
• GGN currently appears to be fairly priced based on a 5% NPV of A$0.24/share (including $35m for Spinifex’s net value) and a gold price of US$400/oz. However, Mupane’s grades and unit mining costs appear to be conservative, such that 10% higher grades can increase the NPV to A$0.32/share, and the Tanzanian assets should be capable of realising more, apart from the Botswanan potential.