Romarco’s Gold Rush In The Carolinas

Romarco Minerals (R-V) is finding there’s still plenty of gold left in South Carolina’s hills.

Before California became the prime destination for 19th century prospectors all over North America, it was the Carolinas that were synonymous with the phrase “gold rush” in a young United States of America.

Romarco wants to bring some of that lustre back and, to that end, released solid drill results from its Haile gold mine in South Carolina in the week before Labour Day.

The project is currently made up of three proposed pits: Ledbetter, Snake and South.

On Aug. 31, results were released from the area around the highest-grade of the pits, Ledbetter.

The results were highlighted by 4.5 metres grading 8.2 grams gold, 10.7 metres grading 7.2 grams gold, and 39.6 metres grading 4.7 grams gold. Those results were from reverse-circulation (RC) drills and occurred within a range of 58 and 185 metres below surface.

But high-grade gold isn’t restricted to Ledbetter, as such zones have been found south of Ledbetter and also east of Snake — where a hole in July returned 34 metres grading 5.3 grams gold.

And perhaps more significantly, drilling hit on a mineralized zone east of Ledbetter and trending south towards Snake. The company says drilling will continue towards Snake with the expectation that the two deposits will connect.

As for Snake itself, results released on Sept. 1 weren’t quite as impressive as those from its neighbour Ledbetter. Assays were highlighted by 32 metres at 4 grams gold, 6.1 metres at 2.1 grams gold and 13.7 metres at 1.8 grams gold. Those results came from a depth below 239 metres and were also from RC drills.

With drilling indicating that mineralization extends between the three pits, the company believes all pits will be expanded thus bringing about a reduction in strip ratios if the project becomes a mine.

For the entire year, Romarco plans to drill 85,000 metres with four RC rigs. By combining stepout and infill drilling the company wants to add to its resources and convert current resources into proven and probable reserves.

So far this year, the company has drilled 38,000 metres.

A technical report issued a year ago put measured and indicated resources at 25.8 million tonnes grading 1.66 grams gold per tonne for 1.4 million oz. of gold. Inferred resources came in at 16.2 million tonnes grading 1.04 grams gold for 544,000 oz. of gold.

By March 2009, the company had managed to put 17.8 million tonnes into the proven and probable reserve category with an average grade of 2.24 grams gold for 1.3 million oz. of gold.

The technical report issued with the revised resource calculation put average annual production at a future mine at 128,000 oz. gold and 289,000 oz. silver.

Total production costs were estimated at US$450 per oz., and capital costs for construction of the mine at US$153 million.

The Haile project lies in the Carolina slate belt — a geological feature that extends from Virginia to Alabama — and sits between two past producers, the Ridgeway and Brewer mines.

The company’s market cap has grown steadily since the beginning of the year. On Dec. 31 of last year its share price was just 18¢, but shares closed at $1.18 as recently as Sept. 21. The company has 276 million shares outstanding.