From Mining News today.Mining operations start for Avoca...

From Mining News today.

Mining operations start for Avoca


Thursday, 22 February 2007

WESTERN Australia gold play Avoca Resources has taken its first step towards producer status with mine development beginning at its Higginsville project this week, however, its exploration projects in South Australia have stalled due to lack of drill-rigs in the state.

Speaking at the RIU Explorers conference in Fremantle yesterday, Avoca's exploration manager Geoff Collis outlined the company's first step into the mining game, beginning with the re-development of the Trident deposit at the 800,000oz Higginsville gold mine in Western Australia.

"Statutory approval came on Friday and we started the mine … on Saturday. We expect to have 300,000 tonnes in production this year and a million tonnes per annum from 2008, and we hope to have a plant operating by first quarter next year," he said.

The company announced on Friday that it had received the relevant approvals from the Department of Industry and Resources to begin underground development.

Collis also said there was still significant exploration upside at Higginsville, and that further exploration drilling at the project was expected to increase the gold resource at the project significantly.

"We're fairly confident our resources are going to convert to a reserve and at a high rate as well," he said. "We also have numerous unclassified intercepts, really nice high grade intercepts that we've been unable to allocate a resource to. They're waiting for us to get underground and do a fair bit of underground drilling to follow up."

Most people would look at the Higginsville database and say 'that's well explored' – there are 10,000 holes in the database," he said, but pointed out that many of the historical holes drilled by the mine's previous owners were too widely spaced or not deep enough to intersect anything below 150m - where the main ore bodies have so far been located.

"The company has drill rigs working there around the clock," he added.

Meanwhile, exploration at the company's tenements in South Australia, including the Cowell and Port Julia projects, has hit a snag with an "acute" shortage of drill rigs in the state.

"We haven't forgotten about South Australia. South Australia was about 50% of our float and we should be drilling there right now, we've got a fantastic iron-oxide copper-gold on the Eyre Peninsula, and we've got copper sticking out of the ground at the Yorke Peninsula," he said.

Collis said that exploration in South Australia had "really kicked off", making it difficult to find drill rigs and he could not give a date for exploration to resume.

"We were slated to drill that in January but we had a drilling contractor renege on promises. It's very frustrating," he said.

The company also holds gold-nickel exploration tenements at Mt Fisher as well as several other joint ventures in Western Australia.

Avoca's shares rose around 3% to $1.25 on Monday on the back of its announcement that mining operations had started at Higginsville, before reaching $1.32 on Tuesday and dipping back down to $1.29 in morning trade today.