Dioro going underground in ‘08

Australian gold company Dioro Exploration and Joint Venture partner La Mancha....

  Australian gold company Dioro Exploration and Joint Venture partner La Mancha will commence gold production from the underground mining of the Frog’s Leg gold project in the goldfields region of Western Australia in early 2008, following the successful completion of the first phase underground feasibility study.Dioro holds 49 percent of the Mungari East joint venture, which contains the Frog’s Leg deposit, with the remaining 51 percent held by project operator La Mancha, a TSX-listed company owned 64 percent by the Areva Group. The first phase underground feasibility study was conducted by La Mancha and AMC Consultants and is a defining step into production for the Frog’s Leg deposit, which is still undergoing extensive exploration to upgrade the current gold resource. The feasibility study envisages the extraction of 3.65 million tonnes at a fully diluted grade of 5.29g/t Au (622,000 JORC Ore Reserve ounces) over a 7.5-year mine life. This represents an 86 percent conversion from measured and indicated resources to reserves. AMC has been involved in all underground studies on Frog’s Leg, either as the principal consultant or as an audit consultant for Dioro. According to Dioro, it is the intention of the joint venture to complete a resource upgrade incorporating all new drilling in early 2008. After the resource has been recalculated, the joint venture will update this first phase mining feasibility study and reserve calculations. Dioro Exploration’s Managing Director, Rhod Grivas said the completion of the first phase feasibility study was a significant development in the company’s ongoing strategy to become a significant gold producer in the goldfields region. “The feasibility study has confirmed that Dioro and La Mancha will be converting an excellent, robust resource into a very profitable underground mine, while at the same time continuing to grow the known resources at the project,” Mr Grivas said. “We will have an operating surplus of at least A$85m at a gold price of A$900/oz, which will add significant value to our company as a new revenue stream and positions us for further growth as a significant Australian gold producer,” he said.