Test drilling by Oceana Gold, next to its underground operation at Macraes in East Otago, has delivered "promising results" of "significant" gold grades from its latest drilling programme.
Chief executive Paul Bibby said, in a statement to the market yesterday, the drilling results were "very promising" and the drilling results showed "the likelihood of additional mineralised panels" along the boundaries of what was being mined underground at present.
The results had prompted follow-up test programmes in the area, he said.
Mr Bibby highlighted two of eight drilling results where "significant intercepts" of gold were found; the first containing 6.78g of gold per ton (g/t) at a length of 13m and the second containing 5.98g/t at 6m.
The two grades and lode thickness were "similar to, or better than" the panel 2 area in the Frasers underground area where mining was at present being done, he said.
Production for 2009 saw an average 2.60g/t taken from Oceana's open pit Reefton mine on the West Coast.
The Macraes operation averaged 1.47g/t.
Oceana has estimated recently the Frasers underground mine has a three-year life and would deliver 55,000-65,000 ounces each year.
Yesterday, Mr Bibby said the positive results were "an all-important first step to extending the mine life of our underground operations".
In the past five months, Oceana has twice upgraded its estimates of mineral reserves, adding a total of 754,000 ounces to its estimate of gold reserves; to a total of 1.6 million ounces.
During the past 20 years, more than 5600 test holes have been drilled at Macraes.
Oceana is stepping up its exploration drilling programme this year, spending about $7 million at Macraes and Reefton.
