Exploration Drilling at Globe Progress Locates Additional Gold

OceanaGold says the inclusion of both shallow and deep resources located in recent drilling, at its Globe Progress mine at Reefton, has resulted in an increase of the mine’s resource to 1.1 million oz of gold.

The West Coast hard rock mine is currently under development and due to begin production at the end of 2006.

OceanaGold says, in its report for the year to 31 December 2005, that a full revision of the resource model including the favorable exploration results from 2005, is likely to again expand the current planned open pit shell, and may require another revision of the latest mine design.

Diamond drilling was undertaken within the proposed Globe Progress open pit to evaluate near surface resources previously delineated by shallow RC percussion drilling. A total of seven exploration holes were completed throughout the year.

Results of the shallow infill drilling programme confirmed the grade and continuity of mineralisation expected in the early stages of mining development and has been incorporated into the resource model for the deposit, the company says.

Resource infill and extension drilling in the deeper levels of the Globe-Progress deposit occurred during 2005. Two phases of diamond drilling comprising 27 holes were undertaken to test the extent and continuity of mineralisation outside but proximal to the open pit design. The drilling intersected significant mineralisation on both the Globe Lode and the Oriental Lode.

OceanaGold says construction of the earthworks infrastructure, including the tailings impoundment and major silt retention structures, at Globe Progress were virtually complete by the end of 2005. The 33 kV transmission line to the concentrator site was only awaiting completion of the final section of the access road.

A contract for the mining and pre-stripping of the initial Globe Progress pit was expected to be awarded by March 2006, with pre-stripping anticipated to begin by the end of the second quarter. Stockpiling of ore will begin almost immediately after initial pre-stripping activities.

The contract for engineering, procurement, and construction management (EPCM) of the concentrator and its related services; was expected to be awarded during the first quarter of 2006.

OceanaGold also conducted regional work to develop other surface exploration targets in other parts of the Reefton goldfield, where the company controls tenements along 35 km of the mineralised trend.

Work programmes, including diamond drilling have been prepared for Inkerman/Supreme, Crushington and the Auld Creek area to the north of Globe Progress. These three areas offer the potential for the discovery of near-surface satellite deposits in close proximity to the proposed Globe Progress processing plant, OceanaGold says.

By the end of 2005, diamond drilling had commenced at the Inkerman prospect to test a mineralised structure 2.5 km south of the Globe Progress deposit and would continue through the first half of 2006.

Reports on the Sams Creek porphyry gold prospect in Nelson state that a project to compile exploration data and review prospectivity of the area was completed in 2005 by geological consultants SRK Australia Ltd.

“Interpretation of the geological database suggests that the Sams Creek dyke may be just one small part of a larger pluton-related alteration and mineralisation system”, OceanaGold says.

SRK have documented four major target styles and suggested a tenement-wide exploration programme to evaluate the potential for each of these targets.

A strategy to obtain the necessary new data and progress the exploration effort over the project area will be developed during 2006, the company says.