Mining company Zedex is going to start gold production in Vietnam despite disappointing drill results at Khe Rin mine.
Drills found omly grams of gold per tonne mainly in single digit quantities. Earlier significant initial indications of gold mineralisations of 71.17g per tonne at Khe Rin made the Zedex share price jump 40% to $1. But after disappointing news shares have slumped from to 48c.
But drills found grams of gold per tonne mainly in single digit quantities, far less than the average 71.17g per tonne indicated earlier.
Although open pit mines can be profitable with a gold grade of 3- 4g per tonne, 10-12g per tonne is considered good for an underground mine.
Although early results at Khe Rin were less than anticipated, drilling was continuing. Meanwhile, Zedex and North American partners Olympus Pacific and Ivanhoe Mines hoped to start production at Phuoc Son within 18 months.
Planning is in the pre-production phase, with work being done on sourcing plant and production crews from Asia and Australia.
The company is working to secure production licences from the Vietnamese government.
Zedex, with Olympus, in which it has a 30% stake, controls 57% of New Vietnam Mining Corp, the first to be granted exploration licences under new Vietnamese mining laws.
Finds of up to 20g per tonne have been discovered in the company's other drilling sites at Bai Dat and Bai Go, which is considered good quality.