The company said the project has exploration potential of 9.2 million ounces and it has in the past had a good success rate of converting potential into resources.

Ballarat corporate and markets manager Joel Forwood said the company was continually drilling at the Ballarat Goldfields project to upgrade resources to a reserves.

“The construction of a decline at Ballarat East is providing us with drilling platforms to further define the resource,” Forwood told MiningNews.net.

He said the increase had not changed the parameters set out by the pre-feasibility study for the development of Ballarat East, nor had it changed the forecast life of the mine.

The study concluded Ballarat East had a forecast life of 21 years with initial production put at 100,000 ounces per annum at cash costs of $274 per ounce. Ballarat said production at the mine is expected in the first quarter of 2006.

By the third year Ballarat had anticipated Ballarat East would be producing 200,000ozpa.

Shares in the company were down 2.5% to 19.5c in late morning trade.