Deccan Gold strikes a rich patch

Deccan Gold Mines said today that its search for gold in the country has identified 217,000 ounces of gold in the assigned mining area in Karnataka's Dharwad Shimoga basin.

The company expects to produce a minimum of 350,000 ounces at an average grade of 2.5 gram/tonne.

The three main sites with gold resources are Bhavihal and Mangalgatti with roughly 157,000 ounces of gold, and Ganajur with 60,000 ounces, with an average grade of 1.67 gram/tonne.

Mark Creasy, shareholder in Deccan Gold Mines and gold prospector from Australia, said Indian gold production could go up to 100 tonne from the current level of 3 tonne in the next 10 years if the taxation structure and environment norms were made conducive.

Sandeep Lakhwara, managing director of Deccan Gold Mines, said the target of 350,000 ounces of gold from the sites could be reached in only six months.

Mining operations would commence in 12-18 months.

The project is expected to cost the company $5 million and would form part of a total investment of up to $20 million in the mining sector.

He added, "We have identified several targets in the Hutti region that requires detailed drilling. The demonstrated success rate for the discovery of the major new gold mines adjacent to major old ones in Western Australia is 83 per cent. Early exploration by Deccan Gold Mines surrounding the Hutti Gold mine has been encouraging and it is anticipated that the rate would apply here."

The company is however, yet to get prospecting licences from the government to undertake more detailed drilling.

It currently holds only a reconnaissance licence. Once it is granted a prospecting licence, it would apply for a mining licence.