High grades for New Guinea Gold but no news on production

While investors still wait for production at the Sinivit project in Papua New Guinea to finally get fully under way, New Guinea Gold (NGG-V) managed to gain positive momentum on the market by hitting high grade gold at the project.

The company says the latest results are from three trenches that were bulldozed over 220 metres at the southern part of the southern oxide zone. The trenches are roughly 30 metres apart, and each encountered gold at surface.

The mineralization will be easily accessed, the company says, during the start up phase of open pit mining. NGG holds a 92.5% interest in Sinivit.

Highlights from the trenches include: 13.8 metres grading 10.74 grams gold; 13 metres grading 13.51 grams gold and 1 metre grading 90.2 grams gold.

The trenches indicate good continuity in the gold mineralization and that gold mineralization previously intersected in drill holes, extends to the surface,” said New Guinea Golds chief executive Robert McNeil in a statement.

And while the market applauded the news in Toronto on Feb. 15 the companys shares were up nearly 22% or 8 to 45 on roughly 500,000 shares traded the press release was short on details as to when the project will move into production.

Last summer McNeil told The Northern Miner that Sinivit was slated to go into production by the third quarter of 2006. The company then changed its guidance and said construction would be completed in December of 2006. That was changed again and the company said construction would be completed in the first quarter of this year.

In its release the company says only that some mining has commencedand a complete update on Sinivit including scheduling to gold production is expected to be released by the end of February.

The company also reports that reverse circulation holes are being drilled on a semi-regular pattern to depths of 30 metres across the proposed southern oxide pit for grade control.

Thus far 40 of a planned 100 drill holes have been finished with assays anticipated to be ready in roughly 3 weeks.

Sinivit has an oxide resource of 713,000 tonnes of ore averaging 5.7 grams gold per tonne and another 340,000 tonnes grading 3.2 grams in the inferred category. Cash cost are estimated at US$120 an oz. and the project is expected to produce 35,000 oz. of gold in its first year of production.

New Guinea Gold has 12 gold and copper-gold-molybdenum projects in Papua New Guinea — 11 of which host known deposits or mineralization. Its 2007 drill program also aims to define gold resources at its Normanby, Mt Penck, and Sehulea properties.