Republic Gold Limited (ASX:RAU) Quarterly Report For The Period Ended 31 December 2009

Perth, Feb 3, 2010 AEST (ABN Newswire) - Republic Gold Limited (ASX:RAU) is pleased to provide a Quarterly Activities Report for the period ended 31 December 2009.

Work During the Quarter

During the Quarter, the Company completed its surface trenching and pitting programme over the main mineralised zone at the Amayapampa Gold Project in Bolivia ("Project"). This allowed the commencement of work on a resource upgrade for the Project.

The surface sampling programme continues to the northeast of the proposed open pit and is covering the waste dump and treatment plant sites in order that these areas can be sterilised.

Training of mine operators in the use of heavy equipment continued. The new surface topography was completed. A new metallurgical testwork programme was successful using Gekko System's gravity technology.

The Project was visited by consulting social and economic experts from Australia.

On 6 December 2009, national elections were held in Bolivia. This resulted in President Evo Morales being returned with a significantly increased majority.

Bolivian Presidential Elections

Presidential, Congressional and Senate elections were held in Bolivia on Sunday, 6 December 2009.

Indications are that President Evo Morales has been returned with a substantially increased majority. This increased majority gives President Morales a strong mandate to continue his Government's policy reforms aimed at the alleviation of poverty amongst the nation's majority indigenous population. This stronger mandate is expected to provide improved political stability for Bolivia and enhance the investment climate.

The new Government Senator representing the Project area, Sn Efrain Condori L. visited the Project in January and addressed the workers and their families. Senator Condori has a strong mining background having been National President of FENCOMIN, the Bolivian Cooperative Miners Association. He gave a very strong speech and pledged his support for the Project.

Surface Topography

Surface topography work was completed by the Bolivian Military National Institute of Aerophotogrametry covering the Company's concessions at Amayapampa. This new topography was delivered to the Company late and then required considerable work to integrate it with the drilling and surface sampling data. This integration work was completed in late-December.

Resource Upgrade

The resource upgrade that was commenced during the Quarter is a major revamp of the previous geological block model containing 1.1Moz, with extensive new data being input.

The surface sampling programme was completed in the second last week of October, with all samples dispatched for analysis. A total of 36 trenches over nearly 5 kilometres have been completed, along with 5-metre deep shafts every 10 metres along each trench. The surface sampling will compliment the earlier diamond core drilling completed by the Company.

Work resulting from the Company's consulting Structural Geologist, Dr Steve King's site visit in September is awaiting the final survey adjustments to the database before completion. The structural geology framework will form an integral part of the upcoming mineral resource estimate update. The understanding of the deformation and movement of the sediments is important for not only highlighting future targets, but also in optimising the orebody interpretation and grade estimation.

The Company is examining the cut-off grade at which the new resource will be reported. The current resource is reported at a cut-off grade of 0.6 g/t Au. When this resource was estimated in November 2008, the gold price was approximately US$750 per ounce and a tonne of mineralisation at the average grade of the resource, 1.3 g/t Au, had US$31.35 in gold value. At the current gold price of in excess of US$1,050, that same tonne is now has a gold value nearing US$44.00. With this sharp increase in in-ground value of the resource, the potential to lower the cut-off grade is significant.

Treatment Plant Site

The success of the surface sampling programme has meant that the obvious locations for the treatment plant and associated infrastructure were no longer available. The Company's Project Development Manager, Mr Paul Pyke, has chosen a new site on the northeast extremity of the hill that the resource lies beneath. This location is subject to sterilisation sampling, which has commenced.

New Surface Sampling Programme

The prospectivity in the immediate vicinity of Amayapampa offers exciting potential. The sampling teams will now focus their efforts on the zone to the northeast of the proposed open pit, along a local major structure striking for 2.5 kilometres within the Company's concessions. To the northeast of the proposed pit this structure is associated with a number of gold and base metals occurrences, with the previous owners of the Project never carrying out any sampling and mapping in this zone.

Metallurgical Testwork

During the Quarter, the Company received initial metallurgical testwork results from samples of diamond drill core from the Project that were tested by Gekko Systems of Ballarat ("Gekko") using Gekko's unique gravity (inline pressure jig) and intensive leach technology. The testwork for primary mineralisation showed consistently high recoveries and indicated that at a 15% concentrate yield by weight, the average metallurgical recovery increased over the previous average recoveries by 3.5% to 86.6%. Oxide metallurgical recoveries were more variable, as experienced in the earlier testwork, and the average recovery dropped by 1.6% to 82.8%.

Based on the current work and current resource, the primary and transition portion of the 1.1Moz mineral resource at Amayapampa equates to 92% of the total resource. Hence, a 3.5% improvement for the primary mineralisation and a 1.9% improvement for transition mineralisation (the average of the oxide and primary recoveries) will have a significant positive benefit to cash flow for the Project, potentially adding in excess of 15,000 ounces, depending on resource to reserve conversion. The recovery of the additional ounces would be for no cost. The oxide portion of the total resource equates to approximately 89,000 ounces and equates to the potential loss of less than 2,000 ounces only.

Gekko is now performing optimisation testwork that will be done to potentially enhance these recoveries and has completed a Scoping Study that will feed into the treatment plant portion of the Definitive Feasibility Study.

Amayapampa Socialisation Process

The Bolivian Mining Ministry has provided a map to the Company indicating that the consultation required under the socialisation process will be conducted within an area that is covered by a 2.5 kilometre radius from the boundary of the Company's concessions. This area takes in the large community of Amayapampa and six smaller communities which make up the cabildos (native title areas) of Janta Palca that covers the Project and Chojnuma to the south of the Project.

As part of the socialisation process, the Company has visited and explained the project and its benefits to Amayapampa plus the three communities of the Cabildo of Janta Palca. The Company has visited one community in the Cabildo of Chojnuma; Pullukeri. It has received overwhelming support from these five communities. The Company has now held a number of meetings with the remaining two communities it had previously not visited, both in one of these communities and in a nearby town. These discussions are not yet complete.

During the Quarter, the Company engaged ICR to conduct an independent social study of the Amayapampa Gold Project ("Amayapampa" or the "Project") and an economic study of Bolivia concerning inward foreign investment. The resulting report will be used as a crucial Definitive Feasibility Study document and be provided to potential project financiers.

ICR had three representatives visit Bolivia; Mr Jon Greenaway, Mr Scott Rankin and Mr David Grabau. Mr Jon Greenaway is a lawyer with extensive experience and has conducted due diligence and risk assessment projects for banks, multilateral institutions and resources sector companies. Mr Rankin has over 15 years experience managing social issues in developing countries and has worked extensively with Governments, UN organisations and major NGOs. Mr David Grabau is a former diplomat and has had many years of experience conducting country risk assessments for BHP Billiton and the Australian Government's Office of National Assessments and Department of Foreign Affairs and Trade.

Preliminary feedback from ICR has been received and the results from stakeholder consultation are very encouraging, particularly in reference to sovereign risk issues and foreign investment in a large mining project in Bolivia. In addition, ICR will provide guidance on how the Company can advance its social programme at Amayapampa, which is an important process to expedite the development of the project. ICR is expected to hand its report to the Company in March.

Amayapampa Employee Death

The Directors were saddened to report the recent death of Senor German Mamani during the Quarter. Senor Mamani was struck by lightning whilst working in a road construction gang.

Amayapampa Tailings Dam & Water Studies

The Company is using Worley Parsons Komex ("WPK") of Canada to assist in the location and design of a new tailings dam at Amayapampa to replace the dam originally chosen by Vista Gold Corp. The Company believes that the new site will have significant cost and social benefits.

WPK has produced a preliminary tailings dam wall design. WPK is also working on water supply issues for the mine, with investigations into potential groundwater sources for the mine's water supply. The wet season at Amayapampa this year is significant, with a recently installed weather station providing valuable data to assist WKP in its work. WKP has designed four water boreholes which will be drilled at the conclusion of the current exploration programme.

Work Required to Progress the Project

Vista Gold completed a number of Bankable Feasibility Studies, culminating in a final study in 2000. Luzon Minerals Limited partially updated this last study in an NI 43-101 report that was accepted by the Toronto Ventures Stock Exchange as a Scoping Study in 2006. When the Company's involvement in the Project was terminated 18 months ago, it had nearly completed a fully updated Bankable Feasibility Study with the main exception being a detailed study on a new tailings dam, which it had started work on.

The following work is seen as necessary to complete a Bankable Feasibility Study for Amayapampa so that financing for the Project can be sought: -

- Continue the workers' training programme.
- Complete the social consultation process.
- Upgrade the geological block model constructed by the Company.
- Finalise pit optimisation and mine scheduling work.
- Complete a study on the new tailings dam.
- Update the operating and capital costs for the project.
- Complete the new metallurgical testwork.
- Finalise issues with the metallurgical processing route and plant design.

Expenditure & Future Programme

Expenditure for the December Quarter on Amayapampa and other Bolivian interests amounted to A$1,245,000.

Expenditure in the March Quarter will be approximately A$1,300,000 as the Company continues the training programme at the mine, completes the surface sampling programme, completes the water bore drilling programme, upgrades the mineral resource again and progresses the Bankable Feasibility Study.

Corporate

Placement

During the Quarter, the Company completed a placement of 150,000,000 shares at a price of 2.6 cents through Pattersons Securities Limited ("Pattersons"). The placement raised A$3.90M before expenses. The response to the placement offer was strong, with Pattersons receiving offers for well in excess of the shares available. Funds from the placement will be used to progress work on the development of the Company's gold projects at Amayapampa in Bolivia and in Far North Queensland.

Directors' Shareholdings

During the Quarter, Mr JP Kelly exercised 765,000 3-cent options. At the end of the Quarter, Mr Kelly had the following interest in the Company: -

- Mr JP Kelly - 1 ordinary share, 4,590,000 ordinary shares held by the Possum Superannuation Fund, interest in 64,285,632 ordinary shares, 12,962,927 options exercisable at 3 cents by 5 June 2010 and 12,962,927 options exercisable at 4 cents by 5 June 2011 held by Zeus Gold Pty Ltd, 2,000,000 options exercisable at 6.25 cents by 10 October 2010 held by the Possum Superannuation Fund and 10,000,000 options exercisable at 6.25 cents by 10 October 2010 held by John Kelly.

Initial Exercise of Options

During the Quarter approximately 9,250,000 June 2010 3-cent options were exercised and 1,025,000 June 2011 4-cent options were exercised raising A$318,000 in cash.

Cash Assets

Cash on hand at the end of the December Quarter was approximately A$4,010,000.

For the complete Republic Gold Quarterly Report for the period ended 31 December 2009, please click the link below:

http://www.abnnewswire.net/media/en/docs/62210-ASX-RAU-331605.pdf

Contact

John Kelly Managing Director Republic Gold Limited Tel: +61-7-4092-2594 Mob: +61-418-577-759