Romarco expands Snake pit mineralization

Vancouver – Romarco Mineral‘s (R-V, RTRAF-O) first drill hole result of the 2009 season has extended gold mineralization in one of three proposed open-pits at the Haile project.

Stepping out about 50 metres northeast of previous drilling at the Snake pit, hole 1547 hit 34 metres grading 5.3 grams gold per tonne starting 248 metres downhole.

At that depth Romarco says the mineralization could still be within extended pit-walls of the Snake pit, the most easterly pit of three adjacent pits outlined in a 2009 feasibility study. The other two pits are called Ledbetter and South.

Romarco president and CEO Diane Garrett says the company is pleasantly surprised by the drill result as not only does it suggest grade is picking up at depth but also that it represents the first evidence at the eastern extent of mineralization of the existence of higher grades more typical of the Ledbetter pit, about a kilometre to the west.

Garrett says drill hole results from two more 50-metre step outs northeast of hole 1547 are pending and that it will be interesting to see if the mineralization continues in that direction and at depth.

“There might even be some underground potential,” she says.

Currently Romarco has four reverse circulation drill rigs turning on the property as part of a step-out, infill and condemnation drilling campaign.

“We’re drilling ten times the footage this year than last,” Garrett says.

In the 2009 feasibility study Romarco outlined a 7,000-tonne-per-day open pit mine with a 12-year mine life at Haile.

The feasibility study pegged capital costs of a mine at about US$153 million. The proposed mine would produce around 128,000 oz. gold per year at a total production cost of US$450 per oz. gold.

Assuming a gold price of US$750 per oz. Romarco estimates the project’s net present value at US$161 million and internal rate of return at 24%.

All told Romarco has outlined measured and indicated resources of 27.8 million tonnes grading 1.81 grams gold.

“We’re still planning to do it on our own,” Garrett says in regard to financing the project.

Part of the reason why Romarco isn’t considering joint-venture partners on the Haile project at this point, she says, is that the company has been growing resources so quickly that it has been difficult to put a value on the project.

Garrett says she expects Romarco will most likely finance the Haile project to production and she says as evidence of the company’s commitment to do so “you’ll see us very soon bring on some exceptional talent.”

On news of the drill result Romarco’s share price gained 1¢ to close at 71¢. Romarco has about 273 million shares outstanding.