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• INTRODUCTION
• 2009 FINANCIAL HIGHLIGHTS
• LETTER TO SHAREHOLDERS
• OPERATIONAL HIGHLIGHTS
  • MESQUITE MINE
  • CERRO SAN PEDRO MINE
  • PEAK GOLD MINES
  • NEW AFTON PROJECT
  • EL MORRO PROJECT
• SUSTAINABILITY
• RESERVES AND RESOURCES
• DIRECTORS AND OFFICERS
• MD&A AND FINANCIALS
• COMPANY INFORMATION
• DOWNLOADS

peak gold mines

Peak Gold Mines in Australia recorded another year of strong performance in 2009, meeting guidance for gold production, exceeding expected copper production and reducing cash costs by 30% compared to 2008. After 17 years in operation, Peak continues to add to reserves and resources, and is exploring targets around the current underground ore bodies and in the surrounding areas.

BACKGROUND

Peak is a gold and copper underground mining operation located in the Cobar Gold Field of Central West New South Wales, Australia. Peak produces gold doré and gold-rich copper concentrate. Peak Gold Mines has been a consistent performer since commencing operations in 1992 and has a stable workforce who reside in the neighbouring community, in contrast to many Australian mines that operate on a fly-in, fly-out basis.

SAFETY AND SUSTAINABILITY

Peak continued to be an early adapter to new Australian legislation and recognized safety standards, including OHSAS 18001, through a comprehensive upgrade of its Health and Safety management System to align the mine with the new standards. There were four minor lost-time incidents in 2009, the same number as 2008. However, consistent with corporate values, when it comes to safety, one incident is too many. With the aid of the upgraded Health and Safety Management System, Peak employees are seeking continued improvement on all safety measures in 2010.

To more fully align its environmental practices with internationally recognized standards, Peak established an integrated Environmental Management System (EMS) at its operation that is compliant with ISO 14001, the International Cyanide Code, which sets out best practices in the use of cyanide, and the Equator Principles, which set a benchmark for the international financial industry to manage social and environmental issues in project financing.

Rehabilitation and reclamation work takes place before, during and after mining activities at New Gold's operations. At Peak, rehabilitation work was completed in several areas where mining operations are now complete. As well, Peak completed and adopted a Waste Management Plan that applies best practices in the recycling and management of waste.

Peak has established active engagement with the neighbouring Cobar community regarding the operation's progress and plans for the future. measures include annual meetings with the community that are well attended by representatives of local businesses, government and community organizations. mine managers and guests discuss various issues relating to activities at the operation in a relaxed and informal setting.

2009 RESULTS

During 2009, Peak successfully transitioned into the copper-rich Chesney orebody and the gold-rich Perseverance Zone D, on time and on budget, positioning the operation for continued steady production at low total cash costs. Peak accelerated underground production to replace low-grade, partially oxidized material stockpiled from the former open pit with the higher-grade underground ore. The benefits for the operation include higher mill feed grade and recoveries.

FUTURE UPSIDE

Peak has continuously replaced reserve and resource depletion for the last 17 years. In 2009, it added approximately 60,000 ounces from year end 2008 levels. There is excellent potential to add further to reserves and resources at targets adjacent to Peak's current underground ore bodies and on its 845-square kilometres of combined mining and exploration licenses within the Cobar mineral field.

Gold sales were in line with 2009 guidance at 87,812 ounces. Cash costs decreased by 30% to $334 per ounce compared to $477 per ounce in 2008 due primarily to higher by-product copper revenue. Higher copper revenue resulted from higher production. Copper sales increased to 13.9 million pounds in 2009 from 7.8 million pounds in 2008.

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