Vatukoula Gold Mines (LON:VGM) reported positive results from its recent exploration programme at its historic gold mine in Fiji - with results including 21 holes with gold grades of more than 3 grams per tonne.
The recent programme included RC drilling and diamond drilling and CEO David Paxton said the company had been "very encouraged" by initial results.
These showed further mineralisation close to surface and possible down dip and along strike extensions of the Vatukoula ore bodies.
"Our focus remains on developing the exploration potential of the mine to expand current production and we look forward to reporting additional drill results," he said.
"The combination of extensive historical mining data, minimal exploration over the last 30 years, and modern exploration techniques provides an exceptional opportunity for Vatukoula to undertake exploration in the Tavua Caldera.
"Vatukoula is a world class gold deposit, with over 7 million ounces of gold produced to date, and a further 3.9 million ounces in resources."
An initial 60-hole programme (covering around 520,000sq m) to explore surface oxide within the current leases showed 21 holes with more than 3 g/t.
The significant intersections included: 5.14 grams of gold per tonne over 17.55 metres; 12.09 grams of gold per tonne over 5 metres and 3.45 grams of gold per tonne over 19 metres.
A mineralised intersection between 0m and 134m below surface was also identified. Results are pending for a further 10 drill holes from this programme, added the company.
"Drilling will now continue on 50m and 25m centres where appropriate, with the aim of defining a resource," said Vatukoula.
Six holes were sunk as part of exploration of the mine's envelope - targeting the Prince and Matanagata North East ("MGNE") Flatmakes and associated structures.
Four holes cut mineralised structures with two holes awaiting assay or are still in progress. Significant intersections included: 23.19 g/t gold over 1.30 metres (Prince Flatmake); 9.61 g/t gold over 0.77 metres (MGNE Flatmake).
The intersection of the MGNE flatmake is over 250 metres away from current workings and outside the firm's current resource model. Drilling will continue from underground when drill platforms are available and the surface diamond drill rig has moved to target mineralised structures within the special prospecting licenses, said Vatkoula.
In March this year, the company said that it would carry out the first exploration around its Fiji operation in almost two decades as it reported a strong rise in full-year sales and earnings.
VGM said 2010 had been a year of consolidation. Production rose to 59,658 ounces of gold from 33,757, thanks largely to the investment it made in plant and machinery.
“Looking forward, 2011 will see the first exploration programme that the mine has seen in almost twenty years,” CEO Paxton had told investors.
“Given that historically, the best place to look for gold is close to existing gold mining operations and as large parts of the Tavua caldera remain largely unexplored, we are hopeful of finding new resources."