Test drilling at historic West Coast gold site shows promise

OceanaGold's second round of exploration at the historic Supreme Prospect, adjoining its Globe Progress development near Reefton on the West Coast, has delivered more encouraging results from recent testing.

In April, dual-listed Oceana undertook a seven-hole drilling programme at Supreme Prospect, about 2.5km from the open-pit Globe Progress development, covering 833 metres, which delivered promising results.

Last week, Oceana said it had now completed 15 test holes in the area which had shown similar promise.

Oceana chief executive Steve Orr said the latest drilling confirmed the principal mineralised structure contains higher grade gold mineralisation at a shallow depth.

"Visible gold has been observed in drill core, associated with quartz veins and sulphide mineralisation."

The programme is scheduled to be completed this month but could be extended.

Orr said: "The continued success of drilling at the Supreme Prospect provides further geological confidence the prospect has potential to host a significant resource of near-surface refractory mineralisation."

OceanaGold is developing the Globe Progress mine for $48 million, including a one million tonne per annum concentrate processing plant.

Globe is expected to be commissioned at the end of 2006 and produce 60,000-70,000 ounces (1700-1984kg) per annum. The concentrate from Reefton will be sent by rail to the East Otago Macraes plant for processing.

Oceana expects to produce up to 180,000 ounces (5103kg) of gold this year, from its Macraes site, where it began blasting the 4.2km Frasers tunnel in April.

Once fully operational, Frasers is estimated to deliver 60,000 ounces (1700kg) for each of the next eight years. Oceana has forecast a 65 per cent rise in its annual gold recovery to about 300,000 ounces (8504kg) within two years.

- OTAGO DAILY TIMES