The market took a dim view of the news and wiped as much as 33c or 20% from Ramelius’ share price, sending it down to a low of $1.28 this morning. The company’s share price has since climbed back to around $1.44.

Ramelius said the initial resource was based only on reverse circulation drilling, and drilling after August - including the current diamond drilling program - was not included.

Of the resource, some 270,0000t at 3.1gpt gold is indicated, containing 27,200oz of gold, while the remaining resource is inferred.

Ramelius said two higher-grade zones within the total mineral resource contain 70% of the gold in the resource, or around 58,600t. Of these, the company estimates Zone 3 contains 73,000oz at 16.5gpt gold from 38,700oz.

The resource estimate also used a top cut-off of 200gpt or 50gpt in various areas of the deposit, the company said.

Ramelius said it is investigating options for exploiting the high-grade zone within the resource.

The company wound up mining at Wattle Dam last year but has been processing ore from the project at the Burbanks.

Earlier this year the company said it had some 100,000t grading 10.1 grams per tonne gold in stockpiles at the project, and its continuing drilling program has returned massive grades including one hit of 1m at 6.7kg per tonne.

MiningNews.net was unable to contact Ramelius managing director Joe Houldsworth for comment this morning.