smh article

Goldstar confident of delivering in Vic
September 7, 2007 - 1:20PM

Junior explorer Goldstar Resources NL admits the company is battling poor public perception about the Victorian gold sector, but the group is confident it won't be another of the state's casualties.

The Victorian gold revival was to be led by the likes of Bendigo Mining Ltd, Ballarat Goldfields NL and Perseverance Corp Ltd, but a host of problems experienced by the companies has put the renaissance on hold.

Ballarat Goldfields was eventually taken over by Lihir Gold Ltd.

Goldstar managing director Andrew King says he was constantly reminded of the failures of a few, but was confident Goldstar could deliver.

"What do I get hammered about the most? Victoria can't deliver a gold producer," Mr King said.

"We're out there now, we're going to deliver."

Goldstar's flagship asset is the Eureka project, about 180 kilometres east of Melbourne in Victoria's east Gippsland region.

The company is conducting a bankable feasibility study into Eureka's development, with potential first production flagged for late 2008 or early 2009.

Mr King was coy on initial production figures and potential costs of the project.

But research from Tolhurst analysts suggests Eureka could cost up to $40 million to develop and produce about 55,000 ounces per year.

Tolhurst's capital cost estimates take into account Eureka's development, along with mining at another reef in the area, Tubal Cain.

Goldstar says Tubal Cain has the potential to underpin a large-scale, long-life project for the company after recently increasing the tonnage of the reef by 57 per cent to 3.6 million tonnes.

"We would like Tubal Cain coming on fairly quickly after Eureka," Mr King said.

"We've always talked about there is potential for a gold province here and we're seeing that now."

While Mr King was enthusiastic about Goldstar's prospects of delivering as a Victorian gold producer, his feet were still firmly planted on the ground.

"As you go forward you are going to stub your toe on some issue but the trick is open about it and deal with it," Mr King said.

"You (have) got to crawl before you walk, before you run."

Goldstar shares were up two cents to 40 cents by 1229 AEST.

© 2007 AAP