Romarco growing resource at historic Haile mine (August 04, 2008)

VANCOUVER–With drilling to confirm the historic resource complete, Romarco Minerals (R-V, RTRAF-O) is 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 area in preparation for an updated resource estimate compliant with National Instrument 43-101, 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 down-hole.

Of note, hole 291, which cut 4.6 metres grading 2.2 grams gold from 41 metres depth, went from mineralization into a post-mineral, diabase dyke. Romarco geologists believe the dyke has bisected the mineralization, meaning it likely continues on the other side. There are several such post-mineral dykes between mineralized zones on the property; historically, drill density was minimized in these areas in order to avoid hitting dykes. 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 dykes, and returned 3.6 grams gold over 6.4 metres.

In the first set of stepout holes, 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. The intercept, which housed gold in pyrite-bearing, silicified, quartzsericite phyllite and in potentially sheared portions of feldspar porphyry, extended the width of the mineralized zone.

Another stepout 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. Hole 295 also extended the zone to the north, cutting three intercepts: 4 metres of 2.2 grams gold from 86 metres, 14.5 metres of 2.7 grams gold from 93 metres, 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 built and the operation ran until 1908, when a fatal boiler explosion shut it down.

The mine started up again in 1937, milling 350 tons per day until it was closed in 1942due to a wartime 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, measured and indicated resources at Haile stand at 7.8 million tonnes grading 2.8 grams gold per tonne; 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 annually for six years.

The operation would sequentially mine six small open pits at an average stripping ratio of 5.25, including prestripping. 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 costs would be US$94 million.

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

The company recently closed a non-brokered private placement of 51.6 million units at 20 apiece for gross proceeds of $10.3 million. Proceeds are earmarked for drilling and permitting at Haile as well as further exploration at Romarco’s Pinos district in Mexico.

Romarco shares recently traded at 16. The company has a 52-week trading range of 15.5-34.5 and has 120.9 million shares issued.