Deccan Gold identifies 22 search zones

By Our Bureau, Business Standard, 1 May 2004 :

Deccan Gold Mines Ltd, the first private sector gold exploration company listed on the BSE, said it has identified 22 independent exploration targets for gold mining, comprising an area of about 5,000 sq km in the Dharwad-Shimoga block. The zone has the potential to host an open-pit gold deposit with an inferred resource of about two tonnes of gold.

With this discovery, the company has once again reiterated its goal to be the first private sector listed company to deliver gold deposit from within its many potential targets.

“No efforts will be spared to achieve this objective. So far, we have incurred an expenditure of Rs 18 crore for exploring these areas. We expect an expenditure of Rs 40-50 crore if we go for an open pit mining,” Sandeep Lakhwara, managing director, Deccan Gold Mines Pvt Ltd said.

When asked about the time needed to commence gold mining, Lakhwara said that a feasibility study will be conducted on the findings and the economics of mining will be ascertained in the coming months. The company has said that once there is a clarity on the mining aspect, it has various options to raise funds.

“We can do a JV with an MNC, go for a rights issue or even explore well-known bullion banks that extend financial support for such mining activity,” Lakhwara said.

According to the company’s chief geologist, Dr Vasudev, further detailed drilling will be undertaken using advanced techniques to determine the true dimensions and shape of the ore body and additional gold reserves that might be present at depth and in the adjacent prospects.

Preliminary drilling activities have now been completed in four of the 22 exploration targets. An exploration programme has been drawn up for the remainder of the 18 prospects.

Geomysore Services India Pvt Ltd, a 100 per cent subsidiary of Australian Indian Resources has provided for the expenditure incurred so far.

Deccan Gold Mines Ltd recently raised Rs 5 crore though an IPO and this amount is yet to be utilised. Mauritius-based Rama Mines has an 85 per cent stake in Deccan Gold Mines Ltd, while the remaining is held by the public.

The company intends to further dilute its equity in the future, so as to encourage increased public holding.