Romarco expands resource following extensive 2011 exploration campaign

Vancouver – Romarco Minerals (R-T) has announced an updated mineral estimate for their Haile Gold Project located along the Carolina Slate Belt in the South-eastern United States.

The 2011 exploration program resulted in a 29%, or 916,000 oz. gold, increase in open pit and underground mineralization estimates.  The results increased the overall resource at the Haile project to 71,171,000 measured and indicated tonnes grading 1.77 grams gold per tonne for 4 million contained oz gold.  The improvement partially came from upgrading inferred resources, which fell by roughly 25% or 271,000 ounces, and now stand at approximately 20,125,000 tonnes grading 1.24 grams gold.

The report was released following an 118,000-metre exploratory drilling program in 2011, as well as updated lithologic interpretations. During the second half of 2011, Romarco’s drilling activities continued to indicate a promising resource base in the four major mineralization zones. Highlights of the recent drill results include: 21.3 metres carrying 43.1 grams gold in the Snake zone; 41.1 meters grading 8.4 grams gold in the Horseshoe zone; and 57.9 metres grading 6.8 grams gold and 62.5 meters of 1.3 g/t gold in the Mustang zone.

When combined with previous reports, the recent assay results indicate that the exploration zones composing the overall Haile footprint most likely belong to a single, major mineralization system.  Consequently, a notable portion of the ‘deep mineralization’ (in the Horseshoe and Mustang zones) was pulled into the US$1,200 per oz. open pit shell estimate.  A fourth zone, labelled Palomino, was also discovered in late 2011 and holds additional exploration upside with assay results including 70.1 meters averaging 5.5 grams gold, and 84.7 meters carrying 3.4 grams gold, 68 meters southwest from hole RCT-140 (26 meters of 1.6 g/t gold).          

The Haile project is located in an area of South Carolina renowned for gold exploration activities dating back to the early 1800’s, as well as continued exploration by several major companies through the 1980’s.   Romarco first acquired the Haile project in 2007, and by 2009 had released a 43-101 resource that outlined a 1.47-million-ounce deposit.  During the 2010 fiscal year, the company proceeded with a 108,000 metre drill program that increased the resource estimate to 3.1 million ounces gold.

Though results for the company have been predominantly positive since the projects acquisition in 2007, the process has not been without setbacks and delays.  Starting in late March 2011, Romarco’s share price dropped from a 12-month high of $2.58 per share to a low of $0.90 in early December 2011.  Price volatility and macro devaluation of many gold stocks through the first half of 2011 was partially to blame for the drop, but the decision by the US Army Corps of Engineers to demand an Environmental-Impact-Statement (EIS) in July 2011 truly sent the share price downwards. The decision imposed a further 12-month permit delay, bringing into question the company’s ability to provide share-holder value through the permit process.

Starting in first quarter 2012, however; Romarco’s share price began to trend upwards, trading at a high of $1.38 per share in late January on the back of the promising drill results and an optimistic overall picture of the project’s long-term production sustainability. Taking into account the more stringent environmental study, the company hopes to have permit approval ‘in hand’ by late 2012, which would mean construction would take place in early 2013, followed by initial production in early 2014.  According to a mine feasibility study dated February 2011, the Haile project will carry a capital costs of $275 million, with an average cash cost of $347 per oz. for the first five years, and a reserve grade of 2.06 g/t.