See attached and below the quarterly Operations Update for Vatukoula Gold Mines plc (AIM: VGM).
Best, Philippe
Vatukoula Gold Mines plc
("Vatukoula" or "the Company")
Operational Update for the Fourth Quarter and Twelve Months ended 31st August 2011
Vatukoula Gold Mines Plc (AIM:VGM), the AIM listed gold producer, is pleased to announce its unaudited preliminary operational results from its 100% owned Vatukoula Gold Mine in Fiji for the fourth quarter and year ended 31st August 2011 (Q4). Highlights (unaudited)
3 months ended Aug 2011 (Q4) 3 months ended May 2011 (Q3) 12 months ended Aug 2011 12 months ended Aug 2010 Gold produced (ounces) 10,670 11,395 52,157 56,214 Gold sold (ounces) 12,066 11,652 53,461 54,642 Average gold price received per ounce (US$) 1,636 1,453 1,429 1,145 Mine (loss) / profit for the period (unaudited)* �0.2 million �(2.8)million �(0.4) million �9.7 million
*Mine (loss) / profit for the period exclude any (losses) / gains from movements in unrealised foreign exchange rates. Operational Highlights � Gold sold was approximately level at 12,066 ounces for Q4 and 53,461 for the year ended August 2011 � Underground ore delivered increased by 40% compared to the previous year to 336,085 tonnes and increased to 91,753 tonnes in the Q4 as compared to Q3 2011 � Underground development for the fourth quarter was 6,751 metres up from 6,349 metres achieved in the third quarter.

The underground development for the year was 24,453 up from 8,720 metres achieved in the previous year.

These significant increases are the result of our on-going development programme � As a result of the continued development programme, roughly 42% of the ore mined in the quarter was sourced from development drives � The total cost per ton of ore mined and milled reduced from US$166 / tonne in the third quarter to US$ 128 / tonne in the fourth quarter.

For the year ended August 2011 the cost per tonne increased to US$144 / ton from US$101 / tonne in the previous year, reflecting an increase in underground tonnages mined and milled as a percentage of the total ore processed, and an increase in underground mining costs � Over the quarter the Company sought increased efficiencies in the mine, including a split firing mining technique whereby the waste and ore are blasted and removed separately.
David Paxton, CEO of Vatukoula Gold Mines, commented: "The last quarter of our financial year again highlighted our ongoing efforts to get the underground infrastructure up to the level required to achieve our near term production targets.

Although we have achieved a much higher rate of development than that achieved last year, we still envisage that during the coming year we will again be focusing on underground development. I am nonetheless delighted to report that as a result of more efficient mining practices and some higher grade material currently being mined towards year end, production has improved substantially. Underground development will continue at the increased rate until we are in a position to sustain production at our targeted rate.

We expect this increased rate of development to continue until Q2 2012.

We expect to produce approximately 65,000 ounces of gold in the financial year ending August 2012.

"
Philippe Polman Account Manager Direct line: +44(0)20 7861 3921 Mobile: +44 (0)7841 672 830 Pelham Bell Pottinger 5th Floor, Holborn Gate, 330 High Holborn, London, WC1V 7QD Tel: +44 (0)20 7861 3232 Fax: +44 (0)20 7861 3233 www.pelhambellpottinger.co.uk
....................................... A CarbonNeutral� company
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