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Acquisition Agreement North Laverton Western Australia

Document date:  Fri 16 Aug 2002
Published:  Fri 16 Aug 2002 00:00:00
Document No:  147963
Document part:  B
Market Flag:  N

FOCUS TECHNOLOGIES LIMITED                    2002-08-16  ASX-SIGNAL-G

HOMEX - Brisbane                                                      


The North Laverton project comprises 6 tenement groups namely the
Swincer Group, West Laverton Group, Barnicoat Group, Napier Comet
Group, Burtville Group and Jasper Hills Group. The 93 tenements
comprise a mixture of mining leases, exploration licences and
prospecting leases with a total area of 307sqkm. The tenements are
currently held 100% by SGW with the exception of the Merolia Joint
Venture (JV) between SGW and Delta Gold. The Burtville-Merolia
tenement group covers an area of 9sqkm and is located about 25km
southeast of Barnicoat. Gwalia has been involved with the Burtville
area since 1988. The Burtville pit supplied supplementary ore to the
mill. This group includes the Merolia tenements.

SGW is manager of Merolia JV and has an interest of 75.5% with Delta
Gold holding the remaining 24.5%. Neither party has a pre-emptive
right. The JV is currently active. Focus will acquire the 75%
interest in the JV under the terms of the Acquisition Agreement.

Royalty Agreements also apply to some of the North Laverton project

On the Admiral Hill tenement a $1.50 royalty per bank cubic metre
("BCM") applies after production of 100,000 BCM of ore and cease at
production of 850,000 BCM ore. No production from the tenements over
which the royalty agreement applies is planned in the first 2 years.

On the Cock of the North tenement a $0.06 royalty for each tonne of
ore in excess of 500,000 tonnes applies, the royalty for the first
500,000 tonnes of ore has been prepaid. No production from the
tenements over which the royalty agreement applies is planned in the
first 2 years. 

On the Napier Well tenement a royalty of $1.00 per BCM of ore mined
and processed. No production from the tenements over which the
royalty agreement applies is planned in the first 2 years.

On the Euro tenement a royalty of $10 per ounce of gold recovered
after the first 50,000 ounces produced.



The Swincer, West Laverton and Barnicoat tenement groups are located
within the northern section of the region generally referred to as
the Laverton Tectonic Zone. The other three tenement groups,
Burtville - Merolia, Napier Well - Comet Well and Jasper Hills (Lord
Byron and Fish deposits) lie to the east of the LTZ.

The LTZ is an elongate north-south trending region of high structural
complexity and high gold endowment. About 22 million ounces of gold
have been delineated within the LTZ in a number of deposits.

The larger deposits held by major mining companies include
Sunrise-Cleo (current resources about 4.5 million ounces). Granny
Smith (past production and current resources of 4.5 million ounces
from 10 deposits) and the most recent large discovery. Just in
Case/Wallaby, which contains some 7 million ounces in resources.
Current reserves at Wallaby are about 2 million ounces gold (18
million tonnes at 3.5g/t).

The greenstone rock sequences within the LTZ have a higher component
of felsic to intermediate volcanic, volcanoclastic and sedimentary
rocks including banded iron formation ("BIF") than adjacent regions.
Mafic and sedimentary rocks are dominant to the west and mafic,
ultramafic and sedimentary rocks to the east.

Mineralization within the LTZ, in common with other Archaean regions,
occurs within a diverse range of litho-structural settings and no
particular setting can be regarded as more favourable than another.


Focus intends to complete a bankable feasibility study ("BFS")
encompassing 8 deposits and address the following areas:

* An infill drilling program to generate additional reserve by
converting as much of the mineral resource of 710,000 oz's into
reserve status. The initial plan is to RC drill approximately 5,000
metres of infill drilling. Drill scheduling is in the process of
being finalised with the view of commencement (subject to financing)
in the coming months;

* A detailed mining plan and schedule;

* A detailed metallurgical plant refurbishment;

* A detailed analysis of operating and capital cost estimations;

* A comprehensive analysis of environmental rehabilitation cost

* The issue of tenders and award of contracts;

* Identify business synergies with neighboring tenement holders for
tenement consolidation, toll treatment opportunities and joint

The mining plan and schedule will aim for an optimized sustainable
production rate to commence at the earliest opportunity. 


In addition to the deposits to be considered in the BFS, eight zones
stand out as being of particular interest based on a preliminary
review of the exploration data to identify advanced exploration
targets within the Laverton Project.

* Admiral Hill - Large tonnage low grade with higher-grade zones.
Possible Heap leach or biox.

* Ida H - Queen Anne - Small resource in open pit with possible
extensions to adjacent deposits and at depth.

* Lillypond Well - Douglass South - Significant Resource with
adjacent mineralization. Possible larger combined resource.

* Burtville - Blue Moon - Extensive "Granny Smith" style
mineralization. Potential for large tonnage - low grade.

* Doberman-Rega-West Laverton-Bulldog - Mineralization traced over
several km with at least one mineable resource. Further exploration
may demonstrate continuity.

* Murray Gladiator - High-grade pods present in BIF host. Other
indications suggest possible resources could be developed on adjacent

* Craiggiemore-Mary Mac - Three separate resources on the one trend.
Further exploration may develop larger play in addition to the
current mine plan.

* Euro - Extensive mineralization is under drilled and not well
understood. Extensions may be possible to the north and south as well
as down dip. The deposit is structurally complex.

Numerous low tonnage - high grade opportunities have also been


The plant comprises a three stage crushing plant, single stage
grinding circuit and a conventional leach/CIL circuit.

* The crushing plant comprises a primary jaw crusher with
secondary/tertiary crushing in a cone crusher and an impact crusher.
The crushing circuit is closed with two double deck vibrating screens
and there is flexibility to operate either or both the cone and
impact crusher. 

* The grinding circuit comprises a 900 KW ball mill operating in
closed circuit with cyclones (duty cluster and standby cluster).

* The carbon in leach circuit comprises 6 draft tube agitated tanks
(each around 400m3) with air purged Minproc type cylindrical
intertank screens.

* Infrastructure items associated with the Plant includes a small
laboratory for control of plant solutions, workshop/store building,
ablutions and plant office/laboratory. Some of these infrastructure
items have been removed from site and will need to be replaced as
part of the refurbishment.


                          1994/95    1995/96     1996/97     1997/98

Throughput, tpa           841,707    951,098   1,100,009    1,042,503 
Head Grade, g/t              1.50       1.28        1.02        1.54 
Recovery,%                   94.0%      94.5%       94.6%      91.84% 
Recovered Ounces           36,952     36,897      33,786      47,494 
Direct Operating Cost, $/t   8.40       8.06        7.64        7.02


The treatment plant has the capacity to treat up to 1.1 million
tonnes per annum depending on the hardness of the ore. The optimum
throughput, however, will be governed by mining rates and careful
grade control procedures. The current Life of Mine plan assumes the
plant will treat 250,000 tonnes per quarter, which is well within its
capacity. Current mine life is 2.5 years though it is anticipated
that this will be extended with exploration success and toll milling.


                                IN PIT                SURFACE 

Tonnes                       1,572,000                900,000 
Grade                             2.32                   0.60
Contained Ounces               117,238                 17,362 
Recovery                         92.3%                     85% 
Recovered Ounces               108,378                 14.757 
Throughput pa                  600,000                400,000 
Gold Produced pa                43,353                  7,130

Forecast capital expenditure is $5.4 million. Of this amount plant
refurbishment and mining startup/mobilization costs are estimated to
be $3.3 million, exploration and feasibility costs $1.6 million and
balance of acquisition costs $0.5 million. Focus is currently
assessing funding options in respect to this cost which are alternate
to the use of equity.

Mining costs have been based on the experience of previous tenement
holders and reference to industry standards, escalated to current
values. Some adjustments have been made to some items where industry
experience suggests a more appropriate cost. Estimated operating
costs are of the order of $30 to $35 per tonne.