Deccan Gold shines as mining licence close to approval

Jayanta Mallick Kolkata | Updated on November 14, 2017

The stock of Deccan Gold Mines Ltd (DGML) witnessed some glitter on Friday. Dalal Street expectations went up after a recent announcement suggesting that one of its mining licence applications was nearing approval stage.

The Re 1 and lone listed junior explorer in yellow metal finished up 2.59 per cent at Rs 19.80 on the BSE. It clocked a volumes of 94,000 shares. The irregularly traded stock touched a high of Rs 22.40 early this month. Its 52-week peak of Rs 27.60 was seen in July last year.

According to DGML, to fast-track approval process, it has written to the Union Ministry of Mines and the Indian Bureau of Mines (IBM). Sources told Business Line that in an attempt to bridge the tame gap in the long-drawn approval process, the company requested the ministry and IBM to sort out differences on the issue of categorisation of the resources of deposits.

The application relates to Ganajur Main deposits in Haveri district of Karnataka. Consultants – SRK – classified mineral resources estimates under JORC code in February. The Ministry, however, still recognised resources estimation under UNFC guidelines.

Mining industry sources said categorisation under JORC code is accepted globally and the resource estimators internationally have stopped doing evaluation of deposits under UNFC guidelines.

The SRK's Scoping Study demonstrated that at a sustainable gold price greater than $850/oz, the Ganajur Main Project has the potential to develop into a viable open-pit mining operation. “Additional in-fill and deep drilling planned for completion within 2012 has the potential to further improve project attractiveness.”

Deccan Exploration Services Pvt Ltd, a wholly owned subsidiary of DGML, was granted prospecting licence (PL) over an area of 2.2 sq. km by the Karnataka Government in 2009. The mining licence application for 9.29 sq. km has been recommended by the Karnataka Government.

The company promoter – Rama Mines Mauritius Ltd – currently holds 44.16 per cent stake. MSPL Ltd, an iron ore miner, has 2.09 per cent stake in DGML as an investor.

Published on March 30, 2012

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