The company has mined Fortnum since 1993 but needs to find further mineralisation to extend its 12-month mine life. The best of its drilling results included intercepts of 2m at 7.6g/t gold.
“The results are a little disappointing,” Perilya’s exploration manager Paul Cranney said.
“But when we first started off at Fortnum the mine only had two years in it.
“We are still spending about $1 million exploring around the area, but we won’t continue if we don’t find good targets. There is no use flogging a dead horse.”
Perilya is covering its bets by searching for a new acquisition in light of Fortnum’s dwindling mine-life.
“We are always on the warpath for a new acquisition,” Cranney said. “At the moment we look at about a property a week.”
But production at Fortnum mine has improved, with the June quarter figure of 22,607 ounces of gold pushing the company’s yearly total to a record 93,294oz, up from last year’s 85,092oz.
Attractive results were found at Perilya’s current drilling programs at the Beltana and Aroona base metal projects in the Flinders Ranges, South Australia, and its copper-gold project in Sabah, Malaysia.
Perilya has secured an option to purchase 100% of Beltana and Aroona mines from Pasminco Limited.
Areas at the sites explored by Perilya so far have produced high-grade intercepts, including 19m at 24% zinc and nine metres at 42% zinc, confirming and extending the known resource adjacent to existing pits.
The mining leases had a combined pre-mining reserve of 1 million tonnes grading at 37% zinc, which was mined in open-pits.
Drilling at the Bongkud project in Sabah intercepted 74m at 0.57% copper and 1.17g/t gold.
“For a porphyry copper system these results are pushing into a good grade for mining,” Cranney said. “We are looking for an improvement of copper grade, but the gold grades are promising.”
Declining gold prices have taken their toll on Perilya, with shares trading at 28.6c, cash-backing.
Last year the company had an average sale price of $508/oz of gold. Costing Perilya a cash operating price of $366/oz.
The company has hedged 81,459oz of gold at a price of $451.60/oz, below the June spot price of $484.05/oz.
Despite the current industry downturn Perilya remains in a sound position with cash and liquid assets in excess of $20 million.
