Our Bureau, Mumbai, 3 March 2004 :

DECCAN Gold Mines Ltd, the country’s first listed gold exploration company, is gearing up to launch advanced drilling exploration at some “potential prospects” near Dharwad and Hutti in Karnataka.

The company, which has procured sophisticated drilling machines, is optimistic of striking gold and commence production of the yellow metal within the next two years. The company has spent about Rs 16 crore so far for gold exploration operations.

DGML will be investing the Rs 5-crore it raised through the recent rights issue to undertake detailed explorations on the advanced stage prospects that were acquired by the company.

According to Mr Sandeep Lakhwara, the company’s CEO, DGML has applied for six prospecting licences covering an area of about 55 sq km and one mining licence for an area of 16 acres near Dharwad in Karnataka.

“Our preliminary results are very encouraging. In fact, Karnataka and Andhra Pradesh share similar geological characteristics with that of Western Australia, where 280 tonnes of gold is produced every year, as against 3 tonnes in India,” he told press persons here on Wednesday.

He said the initial findings indicate that the yield of the yellow metal would make mining operations feasible. For feasible operations, the yield has to be about 2 gms in every one tonne of rock mined in the case of open pit mines and 5 gms in every one tonne in underground mines.

The company is exploring primarily at four locations – Dharwad-Shimoga belt covering an expanse of 5,000 sq km, Hutti block covering 816 Sq kms and Mangalur block covering 126 sq kms in Karnataka and Ramagiri block covering 260 kms in Andhra Pradesh. “We have chosen to explore larger areas as larger the area of exploration better are the chances of striking gold,” Mr Lakhwara pointed out.

In the recent rights issue, 90 per cent was subscribed by foreign shareholders and the remaining 10 per cent by the Indian public.

“In the years to come, we will see the Indian shareholding going up substantially,” he said.

Majority shares of DGML are owned by the shareholders of the Australian Indian Resources (AIR), while GeoMysore Services (GMS) and Indophil Exploration Resources (IER), the Indian arms of AIR, will be transferring exploration prospects into DGML.