GOLD FIND RAISES HOPE
(Saturday, August 21, 2004) from Fiji Times
DRILLING in the Mount Kasi area has uncovered a new zone of high-grade gold, prompting hopes the mine will be reopened by year-end.
Mount Kasi project owner, Burdekin Pacific chief executive Jerome Vitale yesterday said recent drilling had unexpectedly turned up high-grade material.
"We are very encouraged. It is the best result so far. We found high-grade material in the middle of the pit which we were not aware of before," he said.
"It is something to get excited about but no decision to mine has been made by the company yet and can't be made until we recalculate reserves which will be in November or December.
"Then we can determine whether there is enough to mine or if we need to do more drilling. The decision may be that the new zones can be so good that we want to do more drilling and increase the scope of the project."
Burdekin is looking at two options for the Mt Kasi project.
The first is to make the decision to begin mining which would mean securing project development financing. The company is looking at an annual production rate of 50,000 ounces per year.
The second is to continue to expand the scope of the project by further exploration to take the gold reserves to around 250,000 ounces.
Mr Vitale had earlier told shareholders that the company had already begun talks with prospective project financiers who had expressed interest in the project.
He said no estimates had yet been placed on the value of the find or that of other sites discovered over the past few months.
A team of three geologists, three others in the drilling team and ten locals began major exploration of the Mount Kasi area in February.
"We are 45 per cent of the way through. We're doing 10,000 metres of drilling and have done 4500 metres so far. We intend to continue that over the next three months. So far the results have been encouraging. What we are looking for is more of the same," he said.
Mr Vitale said the new gold areas extended 250 metres in length and about 20 metres deep.
"It is very easy to mine alluvial material because we don't have to drill and blast. It's like a walk-up mining area and because of the ease of mining, it is very cheap and also has very good processing characteristics," he said.
With the gold price at historical highs, Mr Vitale said the preliminary cost estimates for the Mt Kasi project were "very favourable".
But he said there was some concern over rising diesel costs.
"The diesel price will be an issue for power generation at the site. Currently the excise duty by government very high almost bordering on uncompetitive compared to other countries," he said.
"We would be seeking to, at some point, certainly bring this to attention of authorities and government officials there. There is no power grid in the western part of Vanua Levu and that has a pretty big impact on the costs of the project."
Between 1932 and 1946, 63,000 ounces of gold were extracted from Mt Kasi.
The project was redeveloped by Pacific Islands Gold in 1996 but closed two years later after production difficulties and a falling gold price.
They had extracted 55,000 ounces of gold.
Burdekin took over the project in 2001 after their external consultants estimated that around 300,000 ounces of gold remained (including reserves of 167,000 ounces).
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