Resource Mining cuts Wowo Gap drilling costs

THE DRILL SERGEANT: Perth-based minerals explorer Resource Mining Corporation has reduced drilling costs at its Wowo Gap nickel deposit, located 200 kilometres east of Port Moresby in Papua New Guinea by nearly 70 per cent.

Resource Mining is nearing the end of a 300 hole drill program at Wowo Gap that was designed to infill holes on a 200 metre by 200 metre hole spacing within a ten kilometre strike zone of known mineralisation towards the north of the project.

The drilling was also designed to test for extensions of mineralisation to the north and south-west.

”We have now just completed the most significant drilling program for this deposit since it was first explored in the 1950s and the results are very encouraging because the more holes we’ve drilled, the more mineralisation we have identified,” Resource Mining Corporation managing director Warwick Davies said in the company’s announcement to the ASX.

In the last 12 months drilling costs at Wowo Gap have come down from A$300 per metre to less than A$100 per metre.

The company has achieved the dramatic price slash through the use of an innovative custom made man-portable core drilling rig capable of much faster, higher quality and more cost effective drilling using a largely unskilled local workforce.

Without this very significant cost reduction RMC said it would not have been able to afford to complete the 300 hole program.

“The original drilling program planned for 200 infill holes was expanded to 240 then to 300 holes as new areas of mineralisation were identified to the north and south west and this 30 per cent increase in the overall program was completed efficiently with the outcome a testament to the commitment, training and ability of our local workforce,” Davies said.

The latest assay results received are from 50 holes, 35 of which intersected high grade nickel of a grade greater than one per cent nickel with some as high as 1.63 per cent nickel.

“To get seven out of ten holes with grades over one per cent nickel, particularly in areas where we expected to see a close-out of mineralisation, is outstanding,” Davies said.

Davies went on to add the results continue to lend the project to a low cost surface mining operation.

“The efficiency of our drilling program and slow progress by our independent geological consultant has meant a delay in our ability to release an updated resource estimate in July or August 2011 as planned and we will now just release one estimate in November of this year,” he continued.

“This means we’re suspending work on the resource update and will recommence when all assay results are in from the completed 300 drill hole program.”

Final core samples from the campaign are currently being flown to Lae in PNG for sample preparation and when assays have been completed the company said it would recommence the resource update.