Barra Resources up 23pc after massive gold find

Barra Resources Ltd says it has hit pay dirt after uncovering what it believes is one of the most spectacular gold discoveries in Australian resources history at its Burbanks underground mine near Coolgardie.

The exceptional high grade hit yielded 10,300 grams per tonne gold - or over 10 kilograms per tonne.

Managing director Dean Goodwin said he had been drilling for two decades in and around the Kambalda-Kalgoorlie gold region and could not recall an intersection of this magnitude.

"Barra will now intensify its drilling campaign around this new discovery as it is nowhere near Burbanks' previous historical underground workings and is well below current mine development," Mr Goodwin said.

The hole is the deepest ever drilled on the field, encountering the intersection at 350 metres depth. Its drilling was only made possible by the completion by Barra in recent months of its extensive decline development at Burbanks in readiness for a resumption of full scale production next year.

The company has been conducting continuous and intensive infill drilling to add to its reserve inventory after producing more than 27,000 ounces of gold this year, halting production only in August to allow greater focus on the decline and development work, which in turn allowed first time access to deeper mineralisation.

"It was only because the decline work provided new drilling platform opportunities from depth that we could even access deeper and until now, unexplored areas below the mine," Mr Goodwin said.

Mr Goodwin said drilling had now been halted for the Christmas break but would recommence in the second week of January.

The discovery is the second major gold development for Barra this week in the Kambalda region.

The company yesterday announced a 70 per cent farm-in to the gold rights of Breakaway Resources' acreage just to the northwest of Ramelius Resources' high grade Wattle Dam gold mine near Coolgardie.

The tenement area includes the historic Spargo's Reward gold mine.

Mr Goodwin said the company was close to finalising its forward gold strategy for 2008 and expected to make an announcement shortly, including the schedule for a new resource upgrade, based on results from current drilling.

Shares in Barra spiked 8.77 per cent to 31 cents just moments after the announcement at 1505 AEDT, and were up 23 per cent or 6.5 cents to 35 cents at the close.