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Huge gold grades at Ramelius mine in WA

August 24, 2007 - 4:39PM


Shares in Ramelius Resources Ltd have surged almost 60 per cent on news it has encountered spectacular gold grades at its wholly owned Wattle Dam open pit gold mine in Western Australia.


Ramelius shares have risen as high as $2.10, up 78 cents or 59 per cent, during the day. At 1546 AEST, they were trading up 60 cents, or 45.45 per cent, at $1.92.


Best results from drilling to extend the resource at the mine include gold grades of 6.8 kilograms (217 ounces) per tonne and 3.7 kilograms (118 ounces) per tonne as well as intersections of several hundred grams per tonne.


Ramelius managing director Joe Houldsworth said there was little doubt the grades were among the highest yet recorded in Australia's gold exploration history.


"We have now confirmed that Wattle Dam has the potential to be a high grade underground mine and further drilling to extend this super high grade gold zone will commence in the near future," Mr Houldsworth said.


The mine, which is near Kambalda within the company's Spargoville Belt regional project area, commenced first production last year.


Ramelius chairman Robert Kennedy said shareholders could expect future expansion of the mine, supported by further exploration along the Spargoville Belt at a range of locations exhibiting similar characteristics to Wattle Dam.


Dr Sandra Close, director of Australian gold industry consultants Surbiton Associates Pty Ltd, said the grades were the best seen for 100 years.


"It sounds like the early days of the Coolgardie goldfields," Dr Close said.


"If they can find more like this, it will help their average grade."


A new drilling program will commence early next month to test potential extensions to the mine's existing mineralisation.


Consultants have been appointed to assist the mine's development, and calculate resource and reserve estimates.

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Not quite as good as Aurelian but pretty damn good. It seems to have not been publicised much outside Oz.


One interesting bit is when Joe says in the interview (I think he's serious) that the people from JORC are looking at creating a new grade on their scale, so that this fits into it.


I don't think it's just a nugget effect either. There is a consistency to the drill holes.


I traded in and out of these this year to some effect, and got back in today for the longer term. They closed not at 60% up - that was achieved only in early trading when they came out of suspension.


Or on the other hand, maybe the acquittal of John Felderhof (Bre-X) has emboldened a few hucksters of the mining industry.


The unknown here is the size of the deposit. The grades are clearly excellent, and they claim it is open at depth. They need to get on and define a minimum resource, then the market can put a sensible value on it.


The market seems to think these guys are for real - anyone else got any thoughts?

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