The drilling took place at the Thengkham prospect, which is about 7km west of the Khanong copper deposit – the basis of the Sepon mine. Oxiana has been exploring for additional resources at Thengkham since 2004 and managing director Owen Hegarty told MiningNews.net it was a much bigger system than Khanong.

The recent drilling was conducted along the northern margin of the prospect and intersected significant supergene copper mineralisation. Better intercepts included 20m at 20.1% copper from 17m, 9m at 19.22% copper from 33m, and 22m at 4% copper from 32m.

Future drilling will delineate the extent and geometry of the mineralisation and establish a resource at Thengkham North by the September quarter. The Thengkham South prospect already has a resource of 10 million tonnes at 2.3% copper for 230,000t copper, and Hegarty said the North prospect was shaping up with higher grades.

Oxiana stripped the first copper cathodes at the project earlier this month, with 2005 production forecast at 30,000t. The operation has a design capacity of 60,000t per annum, which Hegarty said would be achieved in December 2005.

He said the resource at Sepon wouldn’t have to be much larger before the company committed to an expansion to between 100,000-120,000tpa based on a mine life of 15 years.

It has been producing gold from the dual commodity operation since the March quarter of 2003.

Meanwhile, Oxiana has had gold success at the Prominent Hill project in South Australia, with drilling returning intersections of 31m at 11.1 grams per tonne gold and 19m at 11.7gpt gold, following up a previous intersection of 57m at 7.7gpt. The hit indicated the presence of gold-only mineralisation.

Drilling is continuing at Prominent Hill with five rigs now on-site. Hegarty said Oxiana wanted to drill deeper to find the bottom of the mineralisation and other directional extents.

Shares in Oxiana put on over 3% to 98c in late morning trade.