Romarco growing resource at historic Haile mine (July 02, 2008)

Vancouver – With drilling to confirm the historic resource complete, Romarco Minerals (R-V) is now focused on expanding the gold zone at its Haile mine in South Carolina. Both efforts are returning promising results.

Until recently Romarco concentrated its drilling efforts within the historic resource in preparation for an updated, NI 43-101-compliant resource estimate due out shortly. Of late, however, the company has started stepping out from the known deposit in order to grow the resource.

Strong infill drill results include hole 303, which cored 18 metres averaging 2.8 grams gold, and hole 304, which returned 10 grams gold over 6.1 metres, among other intercepts. Hole 296 also returned an encouraging result: 3.85 grams gold over 33.5 metres, starting 66 metres downhole.

Of note is the fact that hole 291, which cut 4.6 metres grading 2.2 grams gold from 41 metres depth, went from mineralization into a post-mineral, diabase dike. Romarco geologists believe the dike has bisected the mineralization, meaning it likely continues on the other side. There are several such post-mineral dikes between mineralized zones on the property; historically drill density was minimized in these areas in order to avoid hitting dikes. Romarco’s team, however, plans to test these areas in the belief that mineralized zones may well be connected. Hole 299 tested that theory, drilling in an area of diabase dikes and returning 3.6 grams gold over 6.4 metres.

In the first set of step-out hole, hole 306 cut 17.8 metres grading 3.1 grams gold from 83.8 metres depth followed by 30.5 metres grading 2.1 grams gold from 137 metres downhole. The intercept, which housed gold in pyrite-bearing, silicified, quartz-sericite phyllite and in potentially sheared portions of feldspar porphyry, extended the width of the mineralized zone.

Another step-out hole extended the mineralized zone to the north with two well-mineralized intercepts. Hole 302 cut 24 metres grading 7.7 grams gold from 78 metres depth, then returned 29 metres grading 9.2 grams gold from 120 metres depth. Hole 295 also extended the zone to the north, cutting three intercepts: 4 metres of 2.2 grams gold from 86 metres depth, 14.5 metres grading 2.7 grams gold from 93 metres downhole, and 3 metres of 6.4 grams gold from 113 metres.

Romarco acquired the Haile mine less than a year ago from Kinross Gold (K-T, KGC-N). Gold was discovered in the area in 1827 and for the next 50 years the region saw placer and smaller-scale operations. In 1880 a small mill was constructed and the operation ran until 1908 when a fatal boiler explosion shut it down.

The mine started up again in mid-1937 and ran until 1942, milling 350 tons per day until it was closed down due to war-time focus on industrial operations. In 1981 Piedmont Mining started exploring the district and mined the Haile deposits from 1985 until 1992, producing some 85,000 oz. gold from an open pit heap leach operation. Amax Gold came in as a joint venture partner in 1991 and the two companies explored the region until 1994.

Kinross acquired Amax in 1998 and assumed its portion of the joint venture; Kinross later bought out Piedmont’s portion. Haile was a low priority target for the major, which simply continued reclamation efforts.

Currently, Haile’s measured and indicated resources stand at 7.8 million tonnes at 2.8 grams gold; inferred resources add 7.4 million tonnes grading 3.1 grams gold.

In the fall a scoping study on the past producer planned out a 4,000-ton-per-day mining operation producing roughly 100,000 oz. gold annual for six years. The operation would sequentially mine six small open pits at an average stripping ratio of 5.25 to 1, including pre-stripping. As a result of the scattered nature of the deposit and consequently high stripping ratio, operating costs are relatively high, coming in at US$350 per oz. Initial capital expenditure would be US$94 million.

Romarco’s primary goal at present is expanding the deposit, as doing so would improve the project’s economics considerably.

The company is in the midst of offering a non-brokered private placement of up to 50 million units at 20 a piece for gross proceeds of up to $10 million. The offering is expected to close before the end of July and proceeds are earmarked for drilling and permitting at Haile as well as further exploration at Romarco’s Pinos district in Mexico.

Romarco lost a penny on news of the latest drill results, closing at 20.5 in July 2nd trading. The company has a 52-week trading range of 15.5 to 34.5 and has 120.9 million shares issued.