Friday, June 6, 2008

Shares soar after Monaghan gold discovery

Precious metals firm Conroy Diamonds and Gold saw their shares soar nearly 30pc Tuesday. The company announced yesterday that it had found the first ever gold resource of over one million ounces to be reported in Ireland or the UK.
The stock finished at 4p a share after Conroy released the news that they had substantially upgraded its estimate of gold at Clontibret, Co Monaghan.
It was confirmed yesterday that although there had not been time to complete significant feasibility studies the initial studies completed show the gold was low grade of one or two grammes per tonne. The company also added that it could take up to two years before studies are complete. The cost of mining and operations will have to be factored in to get an accurate picture.
Company chairman Professor Richard Conroy also confirmed that the testing had been made worthwhile because the value of gold had increased significantly in the recent past to over $940 (€560) an ounce. Gold has been advancing alongside other commodities like oil.
"If gold prices went down to, say, the $300 level, it wouldn't be feasible. It will also be very costly," he said. "If the price dropped to that level, development would be suspended," he added. The cost of extraction is estimated at about $600 an ounce. "We will now start feasibility, technical and financial studies," he said.
Prof Conroy stated that the Co Monaghan site now stands at 440,000 ounces with an additional inferred resource of 590,000. The latest report relates to an area amounting to 20pc of the Clontibret target. The upgrade followed further evaluation and appraisal work by mining consultants G Zandonai on the earlier announcements from Clontibret.
Prof Conroy said the upgrade will attract interest from other developers in the project.
"Once you are over a million ounces you get a substantial amount of gold. From an industry point of view, it puts us in a good position to negotiate if we decide to bring in a joint venture or just go ahead ourselves," he said. "The revised cut-off grade brings us in line with our peer group and gives the company a sound basis for pre-feasibility studies," he added.
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