Deccan Gold seeks mining lease in Karnataka

Our Commodities Bureau in Mumbai, 4 March 2004 :

Mumbai: Deccan Gold Mines Ltd (DGML) has filed for a mining lease near Dharwad in Karnataka, which has the potential to produce 5-6 grams of gold per ton of earth.

The Dharwad-Shimoga blocks offer the potential for open pittable mining. The company recently raised Rs 5 crore through a rights issue to fund a detailed exploration.

According to Sandeep Lakhwara, managing director, “Surface mining and processing operations can begin in two years if the detailed exploration yields positive results.” Geologists have found 15 prospects in the block containing gold mineralisation.

DGML plans to undertake drilling in this area during March to substantiate the surface sampling and trenching results. Open pit mines, because of their lower cost, offer opportunities to process lower grades of ore.

An average grade of between 2-3 grams a ton will be feasible to mine an open pit operation whereas grades of above six grams a ton will generally be required for underground mining.

Other mining prospects in Karnataka include north and south Hutti prospects, and Mangalur RP Block. Ramagiri goldfields produced 16 grams a ton of earth during 1910-1927.

Other than Ramagiri that is located in Andhra Pradesh, all of DGML’s prospects are located in Karnataka.