Deccan Gold Mines Ltd today said it has been granted prospecting licence for gold mining over an area of 4 sq kms in the Mangalagatti Block in Karnataka's Dharwar District through its subsidiary, Deccan Exploration Services Pvt Ltd (DESPL).
"The Government of Karnataka has issued a grant order dated 11 October, 2012 to this effect. The prospecting licence (PL) deed would be executed with the state government after the completion of the procedural formalities," it said in a filing to the BSE.
The company added that initial exploration during the reconnaissance permit (RP) tenure in the Mangalagatti SE prospect had revealed significant gold reserves.
"... An inferred resource of 1.5 million tonnes at the rate of 1.63 g/t Au (grams per tonne of gold) was estimated based upon results of shallow RC drilling programme," it said, adding that a resource drilling programme will be launched after executing the PL.
Deccan Gold Mines Limited (DGML) is a leading private firm involved in gold exploration and has a large portfolio of exploration prospects in Karnataka, Andhra Pradesh, Kerala and Rajasthan.
The Mangalagatti block forms part of Dharwar-Shimoga Basin of Archaean Western Dharwar Craton in Karnataka and is part of the 'Dharwar cluster' of gold bearing sulphidic chert bands discovered by DESPL, the company said.
The company further said that the PL block comprises of Mangalagatti south-east, Mangalagatti Main and East Prospects and are considered as "highly potential".
A Reconnaissance Permit (RP) is granted for preliminary prospecting of a mineral through regional, aerial, geophysical or geochemical surveys and geological mapping.
A Prospecting Licence (PL) is granted for undertaking operations for purpose of exploring, locating or proving mineral deposit.
Shares of the company closed today at Rs 22.05 apiece on the BSE, up 5% over the previous close.
