Ganajur Gold Project

closed

Economic/Social Impact of the Project Deccan Exploration Services Private Limited [DESPL] is a wholly-owned subsidiary of Deccan Gold Mines Limited, [DGML]. Deccan Gold Mines Limited - “DGML” is a public limited company listed in Bombay Stock Exchange [BSE Scrip Code- 512068]. DESPL explored an area of 1,542 Sq.kms under a Reconnaissance Permit [RP] that resulted in locating several significant gold prospects that included Ganajur Main Gold prospect and a few satellite. Reconnaissance drilling of the Ganajur Main prospect during the R.P. stage revealed the existence of an ore body having the potential to host substantial mineable resource. After having recognized the mining potential of the Ganajur Main prospect, DESPL applied for a Prospecting Licence [P.L] covering an area of 2.2 sq km. The State Govt. obtained the approval of the Ministry of Mines, Govt. of India and granted the PL vide CI.157-MMM.2005 dated 10.9.2009. The PL Deed was executed on 25th Sept. 2009. The PL Block has been explored by using multi disciplinary techniques including substantial drilling as per international standards. The exploration efforts have resulted in upgrading the project in terms of significant increase in gold resource. The Ganajur Main Prospect has now progressed into a mining project containing economically mineable grades of gold. A Mining Lease [ML] application for 0.29 sq.kms of DESPL over the Ganajur Main Gold Project is currently awaiting approval of the Ministry of Mines, Government of India [MoM] after it was recommended by the State Government of Karnataka in the year 2010 vide Ref. CI.30 MMM 2010 dt. 8.11.2010. DESPL has also signed an MOU with the Government of Karnataka during the Global Investors Meet at Bangalore in 2010 for gold mining and setting up of a 2000 TPD gold ore processing plant at Ganajur village. The State High Level Clearance Committee [SHLCC] has also approved the project and permitted acquisition of 200 acres of land for implementing the project. DESPL has proposed to commence an open pit gold mining operation over the Ganajur Main Gold deposit once the ML is granted. SRK Mining Services [India] Pvt. Ltd, [SRK] which is an internationally acknowledged independent certifying agency has submitted an updated Mineral Resource Statement in accordance with the Australasian Code for Reporting of Exploration Results known as JORC Standard. SRK has estimated a total of 308,000 ounces of gold, out of which 301,000 ounces are under Indicated Reserve category equivalent of UNFC 121 Code. The resource has been estimated upto an inclined depth of 120 metres. SRK’s independent evaluation has addressed the mine optimization, process design, waste disposal, management plans, site lay out, infrastructure, capital/operating expenditure estimates, project economics [including key risks and opportunities] and future work programme. SRK’s study has revealed that project is technically and economically attractive and the operations could be scaled up considering the fact that there exist several satellite gold prospects surrounding the Ganajur Main Gold Deposit having distinct possibilities of adding to the existing mineral resource. SRK’s scoping /Prefeasibility studies have demonstrated that at a sustainable gold price greater than USD850/oz, the Ganajur Main Gold Project has the potential to be developed into a viable open-pit mining operation