Perth miner exercises its Italian option

PERTH-based Gold Mines of Sardinia Limited, buoyed by the gold price recovery and exploration success, is planning a second gold mine in Sardinia.

The company, which produces gold at Furtei in the south of Sardinia, says in its September quarter report that subject to approvals work is expected to begin early in 2000 on a trial mine on the Osilo vein field in the north of the island.

“We believe the Osilo fieId has the initial potential to add 50,000 ounces a year to the company’s gold production,” Sardinia managing director John Morris said.

Mr Morris said the project consolidation programme implemented

during the September quarter had positioned the company to take advantage of the gold price recovery.

“We have reduced our cost base at Furtei and the Osilo trial mine is a direct result of the tighter focus we have now on areas of maximum potential,” he added.

The Osilo trial mine is planned to produce about 50,000 tonnes of ore, at an average grade of more than 7.5 grams/tonne, which would be processed by the company’s carbon-in-leach plant at Furtei.

Mr Morris said a full-scale Osilo mine, incorporating an on-site treatment plant, would have a projected life of at least five years.

There is considerable potential to extend this life as demonstrated by recent intersections from the Bunnari vein, where deep drilling is expected to confirm a large zone with average grades of more than 10 g/t gold over mineable widths.