Underground WA gold mine to be profitable

  The current open pit Wattle Dam gold mine in Western Australia would continue to be profitable if it converted to an underground operation, according to the mine’s owner, Ramelius Resources.This follows yesterday’s release by Ramelius of an updated Indicated and Inferred resource estimate for the total project of 540,000 tonnes @ 4.8g/t gold containing 83,200 ounces at its wholly owned gold mine in Western Australia.Ramelius has reported high-grade zones grading in excess of 16g/t gold total across 70 percent, or about 58,600 ounces, of the total resource. The mine has been in operation since March 2006 as an open-pit operation and is expected to move to underground mining early in 2008.Ramelius’ Managing Director, Joe Houldsworth said the upgraded estimates did not include results from the company’s current diamond drilling program.Mr Houldsworth said a mineral resource estimate and geological model had now been completed for the project, which is located 25km southwest of Kambalda in Western Australia, within Ramelius’ Spargoville Belt regional project area.Ramelius has begun investigating options for exploiting the high-grade zones within the overall resource.“We believe the resource will be sufficient to commence profitable underground mining at Wattle Dam, with the company currently investigating options for such development,” Mr Houldsworth said.“Within the total mineral resource, there have emerged two higher-grade zones,” he said.Zone 3 is estimated to contain 73,000 tonnes @ 16.5g/t gold for 38,700 ounces and Zone 18 is estimated to contain 37,000 tonnes @ 16.7g/t for 19,900 ounces. Zone 3 includes a top cut of 200g/t and Zone 18 includes a top cut of 50g/t.“These are extraordinary gold grades,” Mr Houldsworth said. “There is little doubt they are amongst the highest ever recorded in Australia’s rich and long gold exploration history.”