SLIDE 3 In conjunction with the change in the production profile, we continue to implement cost and efficiency
- improvements. Our objective is simply to improve cash generation and we will do this by increasing
head grade and reducing operating costs. We will carry out this process without compromising the health and safety of our employees or in any way damaging the environment. The Broken Hill operation is an important part of our strategy. It has a tremendous asset base to grow Perilya. To my second significant step, Daisy-Milano. At Daisy-Milano we have carried out a surface diamond drill programme to test the orebody below the existing workings. We commenced development of the decline from the existing 6 level, with the aim
- f developing a new 12 level ore drive by December 2004. If this development confirms our diamond
drilling results, and we expect it to, our plan is to take up the option to purchase in the New Year. We are optimistic about the future value of this project to Perilya’s financial well being. My third point, exploration projects and asset portfolio. Exploration and evaluation at our operations and across our portfolio of base metal and gold assets returned success. We are making progress to bring our Flinders zinc oxide project into production early next year and have some exciting gold assays from drill results at our Honeymoon Well Joint Venture near Wiluna. Perilya shareholders have exposure to a wide range of gold, silver, lead, zinc, copper, nickel, oil and gas projects. This is because we have had, for a long time, a strategy of acquiring projects with strong growth potential during cyclical lows in the mining industry. Similarly, during market highs, we are equally happy to sell non core holdings. This strategy is now bearing fruit. Perilya is asset-rich at a time when asset prices are rapidly increasing. We have the potential within this portfolio for substantial growth in shareholder value. We do not buy-and-sit or sell-and-forget our assets and investments. We continue to actively manage
- them. We recently increased our interest to 100% in the promising Mount oxide copper project in
Queensland, for example, and we sold our shares in Independence Group to add $29 million to our treasury. Most significantly, we continue our stake in the energy sector. We hold 20% of Strike Oil Limited, which listed on the Australian Stock Exchange two months ago, and 16% of Comet Ridge Limited. As a result, our shareholders have significant exposure to the Australian oil and gas sector at a time of near record oil prices. We have high hopes of success with these investments. Turning to Board matters. Following the 2003 Annual General Meeting, Colin McIntyre took on the role of acting Chairman and in May 2004, I was appointed Chairman. Barry Cahill, Operations Director, resigned from the Company and the Board in March 2004. We would like to acknowledge Barry’s contribution to the Company, particularly for his role in directing the commissioning of the Broken Hill Operations. We would like to acknowledge the dedication and hard work of our employees throughout the year. They have done a sterling job. Their contribution and continuing commitment to maintaining our core values are vital factors in delivering Perilya’s high performance. As I said at the start, I was delighted to be delivering my Chairman’s Address to you this afternoon. We have made progress. During the year Perilya made $12.9 million profit. We have a sound balance
- sheet. We have good projects and great prospects. I believe we are on the way to becoming a strong,
diversified and sustainable Australian resource company.
